About STO

STO stands for Security Token Offering, a fundraising method that involves issuing tokens representing ownership of a real-world asset or security. Polymesh is a blockchain network that is designed specifically for security tokens, with a focus on compliance, governance, and regulatory requirements.

The tokens in an STO are intended to be compliant with KYC/AML requirements, and securities laws in whatever jurisdictions they touch.

It's recommended that you should do your own research and consult with a financial advisor before making any investment decisions.

There are also platforms like Polymath and Digishares where you may be able to invest in STOs.

How to invest in an STO on Polymesh

Prerequisites:

• A verified Polymesh Account.
• Investors have to possess the required funding tokens (stablecoins or other assets) to be able to invest in the STO.
  • On Polymesh Mainnet, the Funding token can be USDS (Stably's USD stablecoin on Polymesh) or a specific asset issued by the fundraiser.
    For a video guide on how to buy Polymesh USDS with Stably Ramp, please visit this video.
  • On Polymesh Testnet, the fundraiser would need to issue a "test" stablecoin and transfer some of those tokens to the investor.
• The issuer of the token has to make sure the attestations/distribution rules are aligned with the investors so that investors are able to invest in STO. Only investor accounts that meet the token's compliance rules will have the opportunity to invest in an STO. If an investor meets the token transfer/distribution rules for the offering asset and the funding asset, they should be able to invest in an STO as well for the offering asset.

Step 1: Query available STOs

1. Find the STO you would like to invest in on the Polymesh Block Explorer.

2. Click on the triangle on the right-hand side to see more details. Once you have found the STO, you will need to note down the following values:

• FundraiserId
• offering_asset

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Step 2: Invest in an STO

1. Open the Polymesh app

2. Select the key you want to sign the transaction.
3. For the extrinsic, select sto > invest, then fill in the values as per below:

• investmentPortfolio: This is the portfolio in which the offering asset will be deposited in.
  • did: Should be the investor's DID. Enter your Polymesh DID which begins with 0x.
  • Kind: You can leave it as Default. You can switch it to a User portfolio by entering your Portfolio number.
• fundingPortfolio: This is the portfolio that will fund the investment.
  • did: Can be the same as the investor's DID. Enter your Polymesh DID which begins with 0x.
  • Kind: You can leave it as Default. You can switch it to a User portfolio by entering your Portfolio number.

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• offeringAsset: This is the asset to invest in. Enter the offering asset name you gathered in Step 1 in HEX format:

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Note: Use a HEX converter like this one. For the Output delimiter string, select "None".

Example: The offering asset name is "testtoken", which is "4D79207465737420746F6B656E" in HEX.
This HEX value should be padded with zeros to be 12 bytes like "74657374746F6B656E00000" with a 0x prefix, so the value you should enter is "0x74657374746F6B656E00000".

Fill up the offering asset field with zeros until the below message in red disappears:

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• id: This is the ID of the fundraiser. Enter the FundraiserID you've gathered in Step 1.
• PurchaseAmount: This is the amount of offering asset to purchase. Enter the amount of the asset you would like to purchase.
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4. Once all data are filled, click on "Submit Transaction" at the right corner of the page:

5. Another popup window will appear, click on "Sign and Submit" and then sign the transaction with your wallet.

6. A successful transaction is reflected with a green checkmark at the top right of the page:

 

Possible errors and solutions

UnauthorizedCustodian: The portfolio's custody is with someone other than the caller. The investor most likely used the wrong DID to invest or sign the investment call. Make sure that the DID is correct.

FailedToLockTokens: The investor doesn't have enough funding tokens. Settlement affirm calls will also check the granularity of token transfer when trying to lock the tokens.

If you have any questions, feel free to open a conversation with our support team through the Polymesh Community page.