Polymath, a digital asset issuance platform, “optimised for (hosting) compliant assets operating in regulated markets,” has announced it will be building its Polymesh blockchain on Parity Substrate rather than Ethereum.
Ethereum is the world’s second-largest “public” blockchain (self-settling ledger-like database).
Ethereum was inspired by Bitcoin, but Bitcoin only hosts one kind of token, Bitcoins themselves.
Ethereum, on the other hand, has been used by thousands of discreet projects across the globe to issue thousands of cryptographic tokens (or securities) and circulate them to speculators.
Ethereum has also been designed to host potentially elaborate “smart contracts” that can automatically regulate the flow of tokens.
Since Ethereum’s inception in 2014, however, critics have claimed that the system is badly designed and unlikely to scale to accommodate its creators’ ambitions. Due to high volumes of trading traffic, Ethereum has been clogged, slow and very expensive to use at times.
Polymath spends the majority of its announcement touting the technical virtues of Substrate.
Little is said about what informed the decision to leave Ethereum other than, “Polymesh…is highly optimised for compliant assets operating in regulated markets. As such there were some core requirements for the network driven by our experience in building on Ethereum and hundreds of discussions with stakeholders such as banks, trading houses, broker-dealers, exchanges, KYC service providers, custodians and many more.”
One particularly advantageous technical feature of Substrate, says Polymath, is that it, “ships with a finality gadget called GRANDPA which provides deterministic guarantees around finality, rather than a probabilistic finality common to proof of work networks like Ethereum and Bitcoin. For capital markets, this is absolutely critical with T+0 settlement being one key advantage of using public blockchains, and a necessity to avoid block re-organisations…