Polymarket

Polymarket is the largest on-chain prediction market: a venue on Polygon where people trade Yes and No shares on future events, from elections and Fed decisions to football results and the price of bitcoin. A winning share pays $1 and a losing one pays nothing, so a share’s price works as the crowd’s estimate of the odds.

Since it opened in 2020, the company has been fined by the CFTC, had its founder’s flat searched by the FBI, been cleared by US authorities and taken $1.6bn from Intercontinental Exchange, the owner of the New York Stock Exchange. As of October 2026 it runs two venues: the international site, closed to US users, and Polymarket US, a CFTC-regulated exchange. France and Italy block it as unlicensed gambling.

The newest piece arrived on 14 October 2026, when StarkWare opened OffMarket to the public, a privacy layer that places Polymarket orders for traders who never open a Polymarket account.

How Polymarket works: Yes and No shares between $0 and $1

There is no bookmaker. Polymarket does not set odds or take the other side of a bet; users trade with each other, and the price moves with supply and demand. A Yes share at $0.62 means that, at that moment, the market puts the chance of the event near 62%.

Every share is fully backed

According to the Polymarket documentation (read 14 October 2026), one dollar of collateral mints one Yes share and one No share. When the market resolves, the winning share redeems for $1 and the losing one for $0. Because each pair is paid for in full up front, the basic product has no leverage and no counterparty who can fail to pay.

Shares are ERC-1155 tokens on Polygon PoS (chain ID 137). Depending on the market, they are recorded as Gnosis Conditional Tokens or as “Polymarket Protocol V2” positions. Users trade from smart wallets they control; Polymarket’s relayer can submit transactions for them, but the docs state that Polymarket never takes possession of user funds.

pUSD replaced bridged USDC in April 2026

Until spring 2026 the collateral was USDC.e, the bridged version of Circle’s USDC stablecoin on Polygon. Since the V2 upgrade of 28 April 2026 it is pUSD (Polymarket USD), an ERC-20 with six decimals. Two contracts, CollateralOnramp and CollateralOfframp, wrap USDC.e into pUSD and back, and the backing is enforced on-chain. The docs rule out an algorithmic peg or a fractional reserve, and say there are no current plans to list pUSD on outside exchanges.

In practice pUSD is a dollar chip that only works at Polymarket. Its value still rests on USDC and on Circle. Our beginner’s guide to stablecoins explains how that kind of backing works.

An order book matched off-chain, settled on-chain

Trades go through a central limit order book (CLOB). An operator run by Polymarket matches orders off-chain, then the matched trade settles on Polygon through smart contracts, atomically: both legs move or neither does. Users keep custody until that moment.

Matching is fast and cheap, as on a centralised exchange. The price of that speed is that one company decides which orders meet and when. The settlement record, by contrast, is public.

Multi-outcome markets, Combos and Perps

Events with many possible winners, such as a party primary, use what Polymarket calls negative-risk markets, where only one outcome can resolve Yes. The docs also describe Combos, multi-leg positions priced through a request-for-quote system, and Perps, perpetual futures on indices, commodities, crypto and equities with margin and liquidation. Polymarket announced Perps on X on 21 April 2026, Bloomberg Law reported. We could not confirm the date of a full public launch.

Who decides the result: the UMA oracle and Chainlink

Polymarket uses two settlement systems, set out on its resolution page (read 14 October 2026).

Most markets rely on the UMA Optimistic Oracle, an oracle that feeds outside facts to smart contracts and treats a proposed answer as right unless someone challenges it:

1. Anyone can propose an outcome by posting a bond, typically $750 in pUSD.
2. A two-hour challenge window follows. With no dispute, the market resolves about two hours after the proposal.
3. A first dispute, backed by a bond of the same size, starts a new proposal round.
4. A second dispute sends the question to UMA’s Data Verification Mechanism (DVM). UMA token holders debate for 24 to 48 hours, then vote for about 48 hours. A disputed market takes four to six days in all.
5. If the vote lands on “Unknown” or 50-50, each share redeems for $0.50.

Polymarket can also post “Additional context” on-chain through a bulletin board contract. Per the docs, such clarifications cannot change the fundamental intent of the question. What decides a payout is the full rules text, not the headline of the market.

Crypto up/down markets skip UMA. Since 7 August 2026 they resolve on a Chainlink time-weighted average price (TWAP), and on 14 August the five-minute markets moved from a 30-second to a 60-second TWAP, according to the Polymarket changelog. The V2 contracts add an OracleAggregator with three reporter modules (UMA, Chainlink and a single-address reporter); the docs do not say which markets use the third.

The March 2025 Ukraine minerals dispute

The weak spot of the UMA model showed in March 2025. A $7M market asked whether Ukraine would agree to a minerals deal with the Trump administration before April. Its Yes price jumped from about 9% to 100% on 24 and 25 March and the market resolved Yes, although Kyiv had signed nothing. Users on X and Reddit accused a large UMA holder of forcing the vote, The Block reported. Polymarket called the situation “unprecedented”, said it was not a market failure and refused refunds. The holder’s identity was never established.

How Polymarket makes money: taker fees by category

For most of its life Polymarket charged almost nothing to trade. The Polymarket changelog dates the change: taker fees on 15-minute crypto markets from 5 January 2026, all crypto markets from 6 March, a new fee structure covering more categories on 30 March, and a sports rate raised from 0.03 to 0.05 on 10 July.

As of October 2026 only takers pay. Makers, whose orders wait in the book, pay nothing and get back part of the fees as rebates: 20% in crypto, 15% in sports and 25% elsewhere. The docs give the formula as fee = shares × fee rate × price × (1 − price), so the charge peaks when a share trades at $0.50 and shrinks towards $0 or $1.

The crypto row is the docs’ own example; the others apply the same formula. At $0.90, 100 politics shares would cost $0.36 in fees. Polymarket charges nothing for deposits or withdrawals, though intermediaries such as Coinbase or MoonPay may.

DefiLlama counted $481.0M in fees over the year to 14 October 2026 and $129.2M in revenue, the share Polymarket keeps after rebates and rewards.

Polymarket volume, open interest and TVL in October 2026

DefiLlama data retrieved on 14 October 2026 at about 18:30 UTC. The figures cover the parent protocol: the international site, Polymarket US, Combos and Perps.

On 13 October Polymarket US handled $93.7M of volume against $74.1M on the international site, less than a year after the US app began rolling out. Open interest that day was $343.6M on the international site, $194.2M on Polymarket US and $95.0M in Perps.

Volume depends on who counts. DefiLlama puts June 2026, its best month, at $5.95bn. The Block, using combined Polymarket and Polymarket US data, puts June at a record $14.7bn, then $12.9bn in July, $8.4bn in August and $13bn in September. The methods differ, so the two series cannot be compared with each other.

Two warnings sit on top of those numbers. A Columbia University working paper, posted on SSRN and reported by Fortune on 7 November 2025, had not been peer reviewed; it estimated that about 25% of Polymarket trading over three years looked like wash trading, peaking near 60% the previous December. It flagged 14% of 1.26 million wallets and put the share at 45% in sports and 17% in election markets. Bloomberg, cited by The Block, counted at least 34,000 trades flagged as possible insider activity between August 2025 and June 2026.

Polymarket history: from a CFTC fine to ICE’s $1.6bn

2020 to 2022: launch and a first settlement

Shayne Coplan started Polymarket in New York in mid-2020; the CFTC dates its first markets to around June that year. The legal entity is Blockratize, Inc., a Delaware company. In October 2020 it announced a $4M seed round led by Polychain Capital, with Naval Ravikant, Compound founder Robert Leshner and Aave founder Stani Kulechov among the angels, Decrypt reported.

On 3 January 2022 the CFTC ordered Blockratize to pay a $1.4M civil penalty for running an unregistered venue for event-based binary options, wind down the non-compliant markets and cease and desist. Polymarket then pledged to keep US users off the site. “All derivatives markets must operate within the bounds of the law regardless of the technology used,” said Vincent McGonagle, then the CFTC’s acting enforcement director.

2024: election year and an FBI search

On 14 May 2024 Polymarket announced $70M across two rounds: a $25M Series A led by General Catalyst and a $45M Series B led by Founders Fund, with Vitalik Buterin and Dragonfly among the backers. Open interest reached a record $463M on Election Day, 5 November, and the presidential market, settled for Donald Trump on 6 November, drew $3.64bn of volume, according to Decrypt.

On 13 November 2024 FBI agents searched Coplan’s Manhattan apartment and took his phone and other devices; he was not arrested. Bloomberg reported a Justice Department probe into whether US users were trading on the site. On 29 November France’s gambling regulator said Polymarket had geoblocked France after its intervention.

2025: cleared, and a way back into the US

In July 2025 the Justice Department and the CFTC closed their investigations without charges, CNBC reported on 15 July. On 21 July Polymarket said it had bought QCEX for $112M: QCX LLC, a CFTC designated contract market since 9 July 2025, and QC Clearing LLC, a registered clearing house.

On 7 October 2025 ICE agreed to invest up to $2bn at a pre-money valuation of about $8bn; reports put the post-money figure at $9bn. ICE will distribute Polymarket’s event data to institutional clients, and the two plan to work on tokenization. On 8 October Coplan disclosed two earlier rounds: $55M led by Blockchain Capital at a $350M valuation in 2024, and $150M led by Founders Fund at a $1.2bn valuation earlier in 2025, The Block reported.

On 25 November 2025 the CFTC approved an amended order of designation that lets Polymarket’s US exchange run as an intermediated platform, with brokers and futures commission merchants bringing customers. “We’re grateful for the constructive engagement with the CFTC,” Coplan said. The Polymarket US app launched on iOS on 3 December, by invitation from a waitlist and with sports contracts first.

2026: V2 contracts, acquisitions and new money

Polymarket bought Dome, a developer-tools start-up, and the executive search firm Lunch in February 2026, then Brahma, a DeFi infrastructure company founded in 2021, on 18 March, for an undisclosed sum, Fortune reported. Brahma is meant to help scale Polymarket’s on-chain infrastructure and add liquidity to thinly traded markets.

On 27 March 2026 ICE announced a new $600M direct investment as part of a Polymarket equity round, plus up to $40M of shares bought from existing holders. With the first $1bn from October 2025, ICE said this completed its obligations. It left the valuation for later.

Protocol V2 went live on 28 April 2026 at about 11:00 UTC after roughly an hour of downtime, with new exchange contracts, a rewritten order book and pUSD. V1-signed orders stopped working and resting orders had to be placed again.

In August 2026 Bloomberg reported that the April round had closed at a $15bn valuation, with D.E. Shaw and G Squared joining, and that Polymarket was in early talks to raise about $1bn at more than $20bn. Polymarket declined to comment, and none of these figures has been confirmed by the company.

Is Polymarket legal? The US, France, Italy and the rest of Europe

It depends on where you live, and the map moved several times in 2026. What follows is the position in October 2026, not legal advice.

United States: a regulated exchange, fighting the states

The international site is closed to US users. They can use Polymarket US, which runs through QCX LLC, a CFTC designated contract market, under the amended order of 25 November 2025.

Federal approval has not ended the fight with states that treat sports contracts as gambling. The Nevada Gaming Control Board sued in January 2026 and won a temporary restraining order dated 29 January. On 29 May Judge Jason Woodbury of Nevada’s First Judicial District Court granted a preliminary injunction barring sports, election and entertainment contracts in the state while the case runs. Minnesota went further with a law banning prediction markets outright, signed on 19 May 2026; the CFTC and the Justice Department sued, Kalshi and Polymarket joined in, and on 27 July a federal judge blocked the ban before it could take effect, The Block and Courthouse News reported.

Appeals courts are split over the same question for Kalshi, Polymarket’s main US rival. The Third Circuit sided with Kalshi against New Jersey in April 2026. The Ninth Circuit went the other way in Nevada’s case in August, and on 25 September the Sixth Circuit ruled that Ohio and Tennessee may enforce their gambling laws against Kalshi’s sports contracts, according to the National Law Review and DeFi Rate. The split could take the issue to the Supreme Court. Our coverage of the CFTC consultation on retail crypto trading and of how the SEC and CFTC are writing US crypto rules gives the wider picture.

France: blocked since November 2024

On 29 November 2024 the Autorité nationale des jeux (ANJ) said Polymarket had set up geoblocking after its intervention and no longer offered its services in France. It named the publisher as Adventure One QSS Inc., a company under Panamanian law. For the regulator, Polymarket is online betting without a French licence.

The ANJ reminds readers that offering unauthorised gambling in France is a criminal offence, punishable by up to three years in prison and a €90,000 fine, rising to seven years and €200,000 for an organised group. Is Polymarket legal in France? No: the service is not authorised there, and Coindaro does not explain ways around the block.

Italy: blacklisted again in July 2026

Italy’s customs and monopolies agency (ADM) first tried to block Polymarket in November 2025. The site came back after Polymarket appealed to the regional administrative court of Lazio (TAR Lazio). On 10 July 2026 the ADM put it back on its list of unauthorised gambling sites, and it has been unreachable from Italy since 27 July, Gambling.com and Wanted in Rome reported. The court case is still open.

The block cost Polymarket a football deal. SS Lazio had signed a shirt sponsorship worth more than €22M in April 2026; on 11 August the club and Polymarket ended it by mutual consent. Italy’s 2018 Decreto Dignità bans gambling advertising and sponsorship.

Spain, Portugal, Belgium, Poland and the UK

Belgium’s Gaming Commission put Polymarket on its blacklist of illegal gambling sites from 30 January 2025, CDC Gaming reported. Portugal’s regulator, the SRIJ, ordered the site blocked on 19 January 2026 after heavy betting on the presidential election, and Vodafone, MEO and NOS complied, ECO reported; Portuguese law does not allow bets on political events. Spain’s gambling directorate (DGOJ) opened sanction proceedings against Polymarket and Kalshi in May 2026 and ordered a precautionary block, according to Decrypt. Poland is also among the countries restricting the platform, Cointelegraph reported in July 2026, when the Czech Republic added it to its own blacklist.

In the UK, the Financial Conduct Authority confirmed on 6 October 2026 that it is talking to prediction-market operators including Kalshi and Polymarket, the Financial Times reported. The UK ban on selling binary options to retail clients, in force since 2019, still applies.

Polymarket token and airdrop: none as of October 2026

Polymarket has not issued a token. Its help center, last updated on 24 June 2026, says the company “has not announced plans for any airdrop or token generation event”. Trading and liquidity rewards are paid in pUSD. No POLY contract address, supply or allocation exists.

The idea keeps coming back. On 23 October 2025 the chief marketing officer, Matthew Modabber, told the Degenz Live podcast: “There will be a token, there will be an airdrop.” Blockratize filed US trademark applications for “POLY” and “$POLY” on 4 February 2026, The Block and Decrypt reported. At TOKEN2049 in Singapore on 7 October 2026, Coplan described an on-chain asset tied to the company’s economics but named no token, structure or date.

Fake POLY tokens and “claim” pages already circulate. Until Polymarket announces a token on its own channels, treat any POLY contract or airdrop site as a scam.

OffMarket: StarkWare’s privacy layer for Polymarket traders

Every Polymarket trade is visible on Polygon, so large wallets get tracked. StarkWare’s OffMarket, opened to the public on 14 October 2026 after a limited release since August, is built to break that link, according to The Block and Crypto Briefing.

Traders deposit USDC on Polygon and trade without creating a Polymarket account. Funds sit in Starknet’s shared privacy pool, which held about $1.5M across 17,000 deposits on L2BEAT figures cited by StarkWare. Positions are held under wallets derived from user signatures, and orders fill on Polymarket’s own books at market prices. A private order takes about a minute and a withdrawal a few minutes. Polymarket’s taker fee still applies, plus small network costs.

• Deposits are capped at $1,000 USDC per account; StarkWare says the cap will change with demand.
• Keys stay in the browser. Because wallets come from user signatures, positions can be recovered if OffMarket goes offline.
• Financial Privacy Inc., an outside compliance firm, holds a master viewing key in a secure enclave and screens deposits against sanctions lists. The key cannot move funds.
• OpenZeppelin audited the pool contract in June 2026 and reported no critical or high-severity issues; StarkWare formally verified it in July.

OffMarket is not a Polymarket product. It runs under Polymarket’s verified builder program with no formal partnership, and Polymarket can switch off its builder code. It follows Polymarket’s geographic restrictions, so US users are excluded. The privacy is partial: trade size and timing can still point to a trader, and markets, prices and trades stay public. StarkWare chief executive Eli Ben-Sasson said the company is bringing “zero-knowledge technology to Polymarket through OffMarket”. StarkWare has not disclosed user numbers or volume.

Polymarket audits and security record

Polymarket’s contracts have a long audit trail. ChainSecurity reviewed the original exchange in November 2022 and the negative-risk adapter in April 2024. The V2 code was reviewed between March and August 2026 by Cantina, Quantstamp, Pashov, Zellic and Sigma Prime, with formal verification by Certora; the reports sit on Polymarket’s GitHub and are listed in its docs. A bug bounty runs on Cantina. DefiLlama records no hack of the protocol.

Audits cover code. Coindaro rates the project 3 out of 5 on risk: audited many times, non-custodial and backed by ICE, but exposed to regulators in several countries, to UMA votes on disputed markets, to its own off-chain matching operator and, through pUSD, to USDC.

What to watch next

Kalshi’s cases could put the question of state power over sports contracts before the Supreme Court, and the CFTC’s proposed prediction-market rule is still pending. Nevada’s case against Polymarket and the Italian appeal before the administrative courts remain open. Spain’s precautionary block was set for three to four months while the sanction proceedings run. On the token, nothing is scheduled: Polymarket has said only that any announcement will come from its official channels.