# Token Creation

### What is a security token? <a href="#what-is-a-security-token" id="what-is-a-security-token"></a>

A security token is a digital representation of a financial security created using blockchain technology. Like traditional securities, they represent an ownership interest in assets or a claim against the issuer (equity, debt, real estate, etc.). Being created digitally (tokenized) allows them to unlock the power of the blockchain with enhanced features. Security tokens introduce benefits to the market like efficiency through automated operations, increased global liquidity pools, and the creation of new and unique financial assets.

### The Token Creation Process <a href="#the-token-creation-process" id="the-token-creation-process"></a>

The token creation process is where you configure your security token based on advice by your legal and financial advisors. The token creation process has two steps: (1) Ticker reservation; and (2) Token configuration.

### Ticker Symbol Reservation <a href="#ticker-symbol-reservation" id="ticker-symbol-reservation"></a>

Your token’s ticker symbol is an abbreviation used to uniquely identify your security token on Polymesh, similar to AAPL or GOOG to represent Apple Inc. and Alphabet Inc. on the Nasdaq, respectively. On Polymesh, ticker symbols have a maximum character count of 12 characters. This character limit is in support of emerging ecosystem standards.

”Security token issuers can reserve their ticker symbol by paying a protocol fee in POLYX. A ticker symbol can be reserved and held for a maximum of 60 days before the issuer needs to confirm if they will or will not be used it.

Note: Only unique ticker symbols can be used on Polymesh. Check Polymesh in advance of reserving your symbol to see if it is available. If your preferred symbol is in use, it will result in a failed transaction.”

Note: The ticker symbol reserved with Polymesh is not registered with any exchange or regulatory authority and is private only to Polymesh.

### Token Configuration <a href="#token-configuration" id="token-configuration"></a>

The goal of token configuration is to allow users to easily meet the applicable regulations and laws required of them. Additionally, the security token needs to be configured in a way that allows for proper management by the issuer, and understandability by tokenholders and compatible reporting tools. A security token may be a regulated instrument and our goal is to enable users to easily meet the applicable regulations and laws required of them, based on guidance from their legal and financial advisors. When a user configures their token, there are some inputs that cannot be changed and some inputs that can be changed in Token Management.

Note: Token Configuration has a protocol fee, as defined by Polymesh governance.

The following pieces of information will be needed in order to configure a security token successfully. There are some fields that have flexibility allowing you to validate on your front-end; however, there are some fields where validation is happening at the chain level. In the case of the latter, the SDK exposes these validation functions to you:

* Security token name (no validation performed by the SDK)
* Type of asset (validation performed by the SDK)
  * Equity Common
  * Equity Preferred
  * Commodity
  * Fixed Income
  * REIT
  * Fund
  * Revenue Sharing Agreement
  * Structured Product
  * Derivative
* Security identifier (optional; validation performed by the SDK)
  * ISIN
  * CUSIP
  * LEI
  * CINS
  * None
* Assigned Funding Round (optional; validation performed by the SDK)
  * Angel
  * Pre-seed
  * Seed
  * Venture - Series Unknown
  * Series A
  * Series B
  * Series C
  * Equity Crowdfunding
  * Private Equity
  * Convertible Note
  * Debt Financing
  * Other (enter custom)
* Token Divisibility (validation performed by the SDK)
  * Divisible to the 6th decimal point
  * Indivisible token (only full tokens can be transferred and held by tokenholders)
  * Note: Once a divisible token is distributed, you cannot change it to be indivisible. However, if a token is initially indivisible, it can be changed to be a divisible token at any time.
* References (no validation by the SDK)
  * Private Placement
  * Corporate site
  * Investor relations
  * Subscription agreement
  * Share purchase agreement
  * Debt financing agreements
  * Other (enter name)

### Further technical details <a href="#further-technical-details" id="further-technical-details"></a>

‌If you need further information on rules please refer to the API documentation below.

{% embed url="<https://developers.polymath.network/polymesh-sdk-api-reference/classes/securitytoken>" %}


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