{"id":38029,"date":"2024-09-13T16:36:28","date_gmt":"2024-09-13T13:36:28","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=38029"},"modified":"2025-08-30T00:47:05","modified_gmt":"2025-08-29T21:47:05","slug":"what-is-polymarket","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/what-is-polymarket\/","title":{"rendered":"What is Polymarket?"},"content":{"rendered":"
\n

What is Polymarket?<\/h2>\n

Polymarket<\/a> is a decentralised prediction\u2011market platform that lets users wager on the outcomes of various events using cryptoassets.<\/p>\n

\n\u201cResearch has shown that prediction markets are generally far more accurate than polls and expert forecasts. Traders take into account all available information: news, polls, and analysts\u2019 opinions, making considered decisions based on this pooled knowledge,\u201d says the project\u2019s website<\/a>.<\/cite><\/p><\/blockquote>\n

\"main_page\"
Prediction\u2011market home page. Data: Polymarket<\/a>.<\/figcaption><\/figure>\n

Founded in 2020 by Shayne Coplan, the service uses blockchain technology and smart contracts. It initially ran on Ethereum, and later added support for Polygon<\/a>, where transaction costs are relatively low.<\/p>\n<\/div>\n

\n

How does Polymarket work?<\/h2>\n

The Dapp<\/span> lets users bet on real\u2011world events in areas from sport and politics to pop culture, and create new markets.<\/p>\n

Participants trade \u201cshares\u201d in possible outcomes. The more users back a given result, the higher the price of the corresponding instruments rises. If the prediction is correct, traders receive rewards proportional to the amount staked.<\/p>\n

Thus, prices reflect current probabilities of events.
For example, in the Fed rate cut by\u2026?<\/span> <\/em>market, \u201cshares\u201d for 18 September trade at 98.4 cents. This implies a crowd\u2011implied 98% probability of a cut.<\/p>\n

\"Fed_rate_cut\"
Data: Polymarket<\/a>.<\/figcaption><\/figure>\n

If most participants in this market turn out to be right, each purchased \u201cYes\u201d share will be worth $1\u2014so the profit per share will be roughly 2 cents. Conversely, those who bought \u201cNo\u201d will see their stake go to zero.<\/p>\n

\n\u201cBut you are not locked into your trade: you can sell your \u2018shares\u2019 at any time at the current odds,\u201d the Polymarket developers note<\/a>.<\/cite><\/p><\/blockquote>\n

They say users should look for markets where they disagree with current probability estimates and \u201cprofit by staking according to their convictions.\u201d<\/p>\n

The project uses<\/a> UMA\u2019s Optimistic Oracle, a system of blockchain oracles<\/a>. Users can exit markets freely before resolution thanks to the AMM<\/a>.<\/p>\n<\/div>\n

\n

How to earn passive income on Polymarket?<\/h2>\n

Polymarket has a liquidity\u2011rewards programme: users can earn by placing limit orders that support market activity and balance.<\/p>\n

\n\u201cThe closer your orders are to the market mid, the more you earn. Your reward depends on the usefulness of your orders\u2014their size and price level compared to other participants. The more competitive your limit orders, the more you can earn,\u201d the project\u2019s website explains<\/a>.<\/cite><\/p><\/blockquote>\n

Payouts are made daily based on how much liquidity a user\u2019s orders add. The Rewards section shows accrued rewards and other market information.<\/p>\n

\"Daily_rews\"
Rewards section. Data: Polymarket<\/a>.<\/figcaption><\/figure>\n

Each market has an order book. Users can hover over the Rewards<\/em> button to see the amount of rewards available.<\/p>\n

\"OB1\"
Data: Polymarket<\/a>.<\/figcaption><\/figure>\n

Blue lines indicate the maximum spread\u2014the distance a user\u2019s limit order can be from the market mid\u2011price to earn rewards. In the example: if the spread is 3 cents, every order within 3 cents of the mid will be eligible.<\/p>\n

When rewards are accruing, users will see a clock icon outlined in blue:<\/p>\n

\"OB2\"
Data: Polymarket<\/a>.<\/figcaption><\/figure>\n

Payouts are processed automatically each day around midnight UTC.<\/p>\n<\/div>\n

\n

How to get started with Polymarket?<\/h2>\n

You can register on Polymarket using email or a Google account, or via a popular Web3<\/a> wallet such as MetaMask<\/a>, Phantom or Coinbase Wallet.<\/p>\n

\"Sign_up\"
Data: Polymarket<\/a>.<\/figcaption><\/figure>\n

After logging in, deposit funds by clicking the Deposit button at the top right. The platform will prompt you to send USDC on Polygon to a generated address:<\/p>\n

\"usdc-4\"
Data: Polymarket<\/a>.<\/figcaption><\/figure>\n

Then choose markets to bet on future events, sorting them (Sort by) by parameters such as novelty, liquidity, volume and trendiness.<\/p>\n

\"markets\"
Data: Polymarket<\/a>.<\/figcaption><\/figure>\n

To place a bet, click Yes or No on the chosen market, enter the Amount and hit Buy. The example below shows purchasing shares at the market price.<\/p>\n

\"Buy\"
Data: Polymarket<\/a>.<\/figcaption><\/figure>\n

You can also use limit orders, which execute only at a specified price:<\/p>\n

\"Limit\"
Data: Polymarket<\/a>.<\/figcaption><\/figure>\n

There is an option to set an order expiry date. If the order is not filled at the set price within the chosen period, it closes automatically.<\/p>\n

To cancel an open order, click the red cross that appears when you hover over it.<\/p>\n

\"Cancel\"
Data: Polymarket<\/a>.<\/figcaption><\/figure>\n<\/div>\n
\n

How is Polymarket developing?<\/h2>\n

Polymarket\u2019s beta launched in 2020, soon raising $4m<\/a> in seed funding from Polychain Capital, AngelList chief Naval Ravikant, former Coinbase CEO Balaji Srinivasan and CoinShares\u2019 chief strategy officer Meltem Demirors.<\/p>\n

Within three months of launch, trading volume on Polymarket surpassed $1m. Community interest intensified<\/a> amid America\u2019s election campaign.<\/p>\n

\"fund_rounds\"
Polymarket funding rounds. Data: CryptoRank<\/a>.<\/figcaption><\/figure>\n

In late 2021 America\u2019s Commodity Futures Trading Commission (CFTC) opened an investigation into Polymarket, examining whether the firm violated laws by offering swaps and binary options and whether it needed to register with the agency.<\/p>\n

In early 2022 the CFTC fined the prediction\u2011market platform $1.4m. Officials stressed that \u201call derivatives markets must operate in accordance with the law, regardless of the technology used.\u201d<\/p>\n

As part of the settlement, Polymarket restricted trading access for users in the United States.<\/p>\n

Despite regulatory hurdles, the platform continued to grow rapidly\u2014its popularity has accelerated since May 2024. That month the project raised<\/a> $70m across two rounds, with participation from General Catalyst, DragonFly Capital, ParaFi Capital, Vitalik Buterin and others.<\/p>\n

In July, monthly trading volume on Polymarket hit a record $472m, and the number of active traders exceeded 60,000\u2014nearly 16 times April 2024\u2019s tally.<\/p>\n

\"volume_traders\"
Monthly trading volumes and active traders on Polymarket. Data: Dune<\/a>.<\/figcaption><\/figure>\n

Open interest continues to climb, and new accounts are appearing:<\/p>\n

\"OI_new_accs\"
Monthly open interest and new accounts on Polymarket. Data: Dune<\/a>.<\/figcaption><\/figure>\n

The project does not yet have a native token.<\/p>\n

In early September Shayne Coplan announced<\/a> the integration of the decentralised prediction platform into a computer system from Bloomberg.<\/p>\n

\n\u201cWhat was once a fringe, sci\u2011fi idea for transforming the flow of information has now become a new reality. Tens of millions of people are developing the habit of relying on Polymarket\u2019s forecasts as a source of truth to understand what is happening in the world. And these are still the early days,\u201d he wrote.<\/cite><\/p><\/blockquote>\n<\/div>\n

\n

Who competes with Polymarket?<\/h2>\n

The most obvious rival is BET<\/strong> from the team behind the Drift perpetuals protocol. Daily stakes on the launched in August<\/a> Solana platform soon topped $23m.<\/p>\n

The new service offers features such as cross\u2011margin trading and structured bets. It uses a liquidity pool and the Drift stack.\u00a0<\/p>\n

PancakeSwap<\/strong><\/a> in June launched a prediction market<\/a>. Users can bet on the direction of Ethereum\u2019s price, guided by AI\u2011generated forecasts.<\/p>\n

\"PancakeSwap\"
Data: PancakeSwap<\/a>.<\/figcaption><\/figure>\n

In September developers of the leading DEX<\/a> on BSC<\/span> launched<\/a> a Telegram bot that lets users predict the movement of BNB\u2019s price every five minutes.<\/p>\n

To take part, a stake as small as 0.001 BNB is enough. Correct predictions earn a share of the prize pool.<\/p>\n

The Gnosis<\/strong> protocol, launched in 2015, stands out for high decentralisation and flexibility in creating prediction markets. It uses Gnosis Conditional Tokens to split assets into scenarios tied to specific events.<\/p>\n

The Gnosis ecosystem includes the multisig<\/a> wallet Safe, the DEX aggregator CoW Protocol, the Ethereum sidechain Gnosis Chain and Gnosis Auction, a decentralised platform for running auctions.<\/p>\n

Augur<\/strong> is one of the earliest Web3 prediction\u2011market projects. Created in 2014, the platform enables forecasting via Ethereum smart contracts.<\/p>\n

With the 2020 upgrade to Augur v2, support was added for the over\u2011collateralised stablecoin DAI and IPFS<\/a>, the user interface was improved, and oracles from Chainlink<\/a> were integrated.\u00a0<\/p>\n

The Polkamarkets<\/strong> project runs on Ethereum, Moonbeam and Polygon, using an AMM to provide liquidity. Creating a market requires 1,000 POLK tokens; LPs<\/span> receive a share of fees.<\/p>\n

\"Polkamarkets\"
Data: Polkamarkets<\/a>.<\/figcaption><\/figure>\n

SX Bet<\/strong> is a \u201cprediction exchange\u201d launched in 2021 with its own SX token of the ERC\u201120<\/a> standard. The coin can be staked<\/a> to earn additional rewards and reduce betting fees. Wagers can be placed using the utility token<\/a> as well as the USDC stablecoin.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

An explainer on Polymarket: how it works, how it is evolving, and who it competes with.<\/p>\n","protected":false},"author":1,"featured_media":38030,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"1","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[2113],"tags":[1148,1595],"class_list":["post-38029","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptorium","tag-polymarket","tag-prediction-markets"],"aioseo_notices":[],"amp_enabled":true,"views":"218","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/38029","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=38029"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/38029\/revisions"}],"predecessor-version":[{"id":38031,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/38029\/revisions\/38031"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/38030"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=38029"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=38029"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=38029"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}