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Polymarket
Polymarket
from Wikipedia

Polymarket is an American cryptocurrency-based prediction market, headquartered in Manhattan, New York City. Launched in 2020, it offers a platform where individuals can place bets on various future events, including economic indicators, weather patterns, awards, as well as political and legislative outcomes. Participants can deposit USDC cryptocurrency through the Polygon blockchain network and trade shares that represent the likelihood of specific outcomes occurring in the future.

Key Information

Polymarket has blocked access to U.S. customers since 2022, following a settlement with the Commodity Futures Trading Commission, which accused the company of running an unregistered derivatives-trading platform.[2]

History

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Founded in 2020 by Shayne Coplan,[3] Polymarket is a prediction market that allows users to gain/lose on the outcome of world events.[4] In January 2022, Polymarket was fined US$1.4 million by the Commodity Futures Trading Commission (CFTC), and received a cease and desist order for regulatory violations, including failure to register as a Swap Execution Facility.[5][6] According to the CFTC, Polymarket offered "substantial cooperation" throughout the investigation, which resulted in the company receiving a lower fine.[3]

In May 2022, Polymarket appointed J. Christopher Giancarlo, a former Commissioner of the CFTC, as chairman of its advisory board.[7] In May 2024, the company announced that it had raised $70 million across two funding rounds.[8] These rounds included investments from Vitalik Buterin, the co-founder of Ethereum, and Founders Fund, a venture capital firm founded by Peter Thiel.[3]

In June 2023, Mother Jones reported that interest around the company had increased after a tweet about the outcome of the Titan submersible went viral;[9] the premise of the bet was whether the submersible would be found by a certain date,[9] rather than a wager on the fate of the passengers.[10] Polymarket had over 60 markets available at the time of the submersible wager, including the outcome of the Guatemalan presidential election, the likelihood of Twitter suing Meta, and the likelihood that Russia would use nuclear force.[10]

In October 2025, Polymarket secured up to a $2 billion investment from Intercontinental Exchange (ICE), which valued the company at $8 billion.[11]

2024 United States elections

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In 2024, the outcome of U.S. elections became the most active market on the platform,[8] with over $3.3 billion (as of November 5, 2024)[12] wagered on the presidential race between the Republican candidate Donald Trump and Democratic candidate Kamala Harris.[3] Nate Silver, founder of polling analysis firm FiveThirtyEight, became an advisor to Polymarket in 2024.[13] As of September 2024, Polymarket operates its election prediction operations offshore, as domestic operations would be regulated by the CFTC.[14]

A few days after the 2024 U.S. presidential debate held on June 27, 2024, Polymarket predicted a 70% chance that Democratic candidate Joe Biden would withdraw from the 2024 U.S. presidential election (an increase from 20%), weeks before he officially announced his withdrawal.[15] By contrast, on August 5 Polymarket showed 68% odds Kamala Harris would pick Pennsylvania governor Josh Shapiro as her running mate, with Minnesota governor Tim Walz at 23% odds. Harris selected Walz the next day.[16]

On October 7, 2024, Polymarket showed a spike in the odds Donald Trump would win the 2024 election, to 53.3%, with a corresponding decline in Kamala Harris's odds, to 46.1%. Two Polymarket competitors continued to show Harris with better odds of winning, at about 51%; Polymarket also showed a slight edge for Harris throughout September. That day, the FiveThirtyEight simulation model found Harris had a 55% chance to win the election, while elections statistician Nate Silver said his model gave Harris 54.7% odds. Forbes reported on theories for the Polymarket divergence, including that one or more major wagers had been placed on Trump, possibly because Elon Musk had spoken at a Trump rally two days earlier, and had previously promoted Polymarket. On the day of the Trump spike, Musk reposted an X post that asserted "Kamala is collapsing before our eyes." However, due to Polymarket lacking a cap on individual investor amounts, large wagers by one or a few bettors may not reflect a material change in the election landscape. Silver, a Polymarket advisor, said the shift in Trump's favor was a "larger swing than is justified."[17] Polymarket competitor Predictit had since shown Trump with better odds of winning after previously favoring Kamala Harris.[18]

The divergence continued into mid October 2024, showing Trump with 60% odds on October 18. The Wall Street Journal reported the market moves might be a mirage created by four bettors with about $30 million in Trump wagers, though the bets were not necessarily nefarious. The four bettors behaved in similar fashion, leading at least one blockchain analyst to conclude there was "strong reason to believe they are the same entity." Polymarket initiated an investigation of potential market manipulation for an influence campaign in favor of the Donald Trump 2024 presidential campaign.[19] The company confirmed on October 24 that the four accounts were controlled by one French trader with "extensive trading experience and a financial services background," finding no evidence of efforts at market manipulation.[20] The trader ultimately won $85 million upon Trump's victory.[21]

Relationship with Trump family

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The second Donald Trump administration eased the regulatory environment for Polymarket.[22] In July 2025, the Commodity Futures Trading Commission (CFTC) and Department of Justice ended a probe into Polymarket.[22] The CFTC under the Joe Biden administration had entered into a settlement with Polymarket whereby Polymarket agreed to wind down US operations after being accused of running an illegal exchange.[22] Donald Trump Jr. has taken on an advisory role at Polymarket.[22]

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On November 13, 2024, the FBI raided Coplan's home and seized his phone. According to Bloomberg News, the Department of Justice is investigating Polymarket for allegedly allowing U.S.-based users to make bets on the website.[23][24][25][26]

On November 26, 2024, the Swiss Gambling Supervisory Authority blocklisted Polymarket.com due to the controversial aspects of prediction markets in violation of the regulation on gambling and sports betting.[27][28]

On November 29, 2024, the French National Gaming Authority announced that after having investigated Polymarket because its gaming offerings were likely in violation of French laws,[29] the company had agreed to perform a geo-block for France.[30][31]

On January 8, 2025, Poland's Ministry of Finance blocked access to Polymarket.com as a domain that offers Gambling in contravention of Polish laws.[32]

On January 12, 2025, Singapore’s Gambling Regulatory Authority blocked access to the website as it was deemed to be providing unlawful gambling.[33]

On February 3, 2025, the Belgian gambling commission, Commission des Jeux de Hasard, banned the platform from the country, warning every user trying to connect to it that the use of this platform in Belgium is now illegal.[34][35]

On July 15, 2025, CNBC reported that the U.S. Department of Justice and the Commodity Futures Trading Commission (CFTC) formally ended their investigations into Polymarket without bringing new charges. This development marked the resolution of regulatory scrutiny following the company’s earlier settlement with the CFTC in 2022 and enforcement actions in 2024.[36]

Following the end of the investigations, Polymarket announced the acquisition of QCEX, a CFTC-licensed derivatives exchange and clearinghouse, for $112 million. The acquisition allowed Polymarket to legally operate within the United States under regulatory compliance.[37]

See also

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References

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Revisions and contributorsEdit on WikipediaRead on Wikipedia
from Grokipedia
Polymarket is a decentralized prediction market platform founded by Shayne Coplan and launched in June 2020, allowing users to buy and sell shares in binary yes/no contracts on real-world event outcomes using the USDC stablecoin on the Polygon blockchain. Unlike traditional betting sites, it operates via a peer-to-peer, intermediary-free structure powered by blockchain technology, where share prices between $0.01 and $1.00 reflect market-implied probabilities for events in categories such as politics, sports, cryptocurrency prices, entertainment, and global affairs. The platform has emerged as the world's largest prediction market, notable for its high trading volumes—exceeding $3 billion during the 2024 U.S. presidential election—and claims of superior forecasting accuracy compared to polls, driven by financial incentives for participants. Polymarket's growth includes partnerships with entities like the UFC and NHL, a $2 billion funding round at a $9 billion valuation in 2025, and expansion into diverse markets, underscoring its role in aggregating crowd wisdom through decentralized finance mechanisms.

History

Founding and Early Development

Shayne Coplan founded Polymarket in 2020 as a 21-year-old New York University dropout, aiming to harness prediction markets to counter misinformation and enhance collective decision-making after spending the preceding year studying the domain. The platform's early concept emphasized a decentralized model using blockchain technology, shifting away from centralized structures to facilitate peer-to-peer event outcome trading without intermediaries, initially built on Ethereum before transitioning to the Polygon network. Coplan assembled an initial team during the ideation phase to prototype the system, conducting tests ahead of the public beta rollout in mid-2020. The venture secured its seed funding of $4 million in October 2020, led by Polychain Capital and including investors like Naval Ravikant, to support ongoing development.

Launch and Expansion

Polymarket officially launched its prediction market platform in 2020 on the Polygon blockchain, selected for its scalability and low transaction fees that supported efficient peer-to-peer trading of event outcomes using USDC. The platform's expansion included integrations with prominent cryptocurrency wallets, such as MetaMask in late 2025, which enabled seamless one-tap funding and trading from various EVM chains without leaving the wallet interface. Early adoption phases saw initial surges in trading volumes, with the platform recording its first significant activity levels amid broader cryptocurrency market recovery. User base and trading volume growth accelerated in line with 2022-2023 crypto trends, culminating in approximately $73 million in cumulative volume by the end of 2023, reflecting increasing interest in decentralized forecasting tools.

Platform Mechanics

Market Creation and Betting

Users suggest ideas for new markets through community channels, after which the Polymarket team reviews and creates selected markets incorporating user and community input. In trading, unlike traditional sportsbooks where users place fixed-odds bets against the house with odds set by the sportsbook, Polymarket operates peer-to-peer on the blockchain using USDC (an ERC-20 token) as collateral and outcome shares ("Yes/No" positions) as ERC-1155 tokens via the Gnosis Conditional Tokens Framework, allowing participants to buy and trade shares in yes/no outcomes with prices fluctuating between 1¢ and 99¢ based on crowd sentiment; trades involve swapping USDC for specific ERC-1155 outcome tokens (or vice versa) through market maker contracts or proxies. These shares represent "yes" or "no" outcomes for binary events, with share prices ranging from $0 to $1 and reflecting the collective probability assessment, such that one yes share and one no share always equate to $1 USDC; listed percentages in the interface represent these direct share prices, with slight overround (~1%) from bid-ask spreads, e.g., 59% indicates a $0.59 cost per share paying $1 upon correct resolution. To acquire these positions without relying on existing sellers, users can split USDC collateral into equivalent YES and NO position tokens using the splitPosition function on the Conditional Tokens Framework (CTF) smart contract, which Polymarket employs based on Gnosis standards. The process involves: 1) approving USDC transfer to the CTF contract via the ERC-20 approve function; 2) calling splitPosition, which atomically transfers the USDC collateral and mints the corresponding YES/NO tokens if the market condition is prepared, with the transaction fully succeeding or reverting entirely. This mechanism creates new tradable positions directly from collateral, differing from central limit order book (CLOB) trading, which matches existing buy and sell orders (often off-chain with on-chain settlement) but does not mint new shares. Users frequently split collateral themselves to initiate positions and then sell one outcome via the CLOB. Prices emerge from matched limit orders, where, for instance, a yes order at $0.60 pairs with a no order at $0.40 to set the market price. Arbitrage opportunities arise when the sum of the best ask prices for YES and NO shares falls below $1, allowing traders to buy both outcomes for a risk-free profit of $1 per pair at resolution, though such inefficiencies are typically fleeting owing to rapid market corrections, bot competition, and fees. Liquidity is maintained via a central limit order book model using price-time priority, where orders are filled based on best price first, then by the oldest orders at that price, evolved from earlier automated market maker systems, where professional market makers deploy automated strategies to post continuous buy and sell orders for outcome shares, earning rewards for providing depth and tightness. In short-term markets such as 15-minute BTC up/down contracts, odds exhibit high dynamism and often deviate significantly from 50% even during periods of small, stable BTC price movements (e.g., ±0.5% changes without sharp spikes), driven by betting flows, trader emotions, bot activities that amplify swings, and thin order books where medium-sized orders can shift odds by 10-20 percentage points; typical ranges are 40%-70%, with occasional extremes of 20%-80%. Polymarket's Liquidity Rewards program provides direct USDC payouts to makers for resting limit orders that add market depth, with rewards automatically distributed for qualifying orders and no trading fees applied, offering additional yield that can complement strategies such as resolution sniping—where traders time orders around market resolutions for potential edges—and making liquidity provision more attractive relative to taking orders. To counter arbitrage bots exploiting price lags from centralized exchanges like Binance and Coinbase in 15-minute binary up/down markets for BTC, ETH, SOL, and XRP, Polymarket introduced dynamic taker fees up to approximately 3%, with rebates to makers via the Maker Rebates Program. Prior to implementation, such bots achieved profits of $430,000–$484,000 in December 2025 through temporal arbitrage, maintaining near 50/50 odds despite confirmed price movements elsewhere, with win rates around 98% over thousands of trades. Post-fees, these measures reduced profitability for small bots, though well-capitalized ones continued earning, such as $52,000 in 24 hours. Event listening arbitrage, involving real-time monitoring of external events or news for rapid trading, encounters challenges as opportunities close in seconds, requiring low-latency execution and automation amid intense competition, though accessible to retail traders with suitable tools. Trades require depositing USDC on the Polygon network. Traders often hedge Polymarket positions using perpetual contracts on platforms such as dYdX and Hyperliquid, which offer derivatives on prediction market outcomes like elections. A common approach is to create delta-neutral positions by holding a long YES share on Polymarket and shorting the corresponding perpetual, thereby offsetting directional risk while potentially earning from positive funding rates. Projects like PolyHedge automate arbitrage and hedging between Polymarket prices and decentralized exchange perpetuals to enhance efficiency.

Resolution and Payouts

Markets on Polymarket are resolved based on predefined criteria and timestamps established at the time of market creation, which specify the resolution source, end date, and handling of potential ambiguities or ties. Upon the event's conclusion, a proposed outcome is submitted, entering a two-hour challenge period during which users can dispute if they believe the proposal is erroneous. Disputes can stem from technicalities such as exact posting methods, novelty of information, or timing, despite broad credible reporting favoring resolution. If undisputed, the proposal stands; otherwise, disputes escalate to the UMA Optimistic Oracle, where UMA token holders vote on the correct outcome, potentially overriding the initial proposal in edge cases. This decentralized voting mechanism ensures community-driven finality, with data verification drawing from trusted sources outlined in the market rules. Payouts occur automatically via smart contracts once resolution is confirmed, redeeming shares in the correct outcome for $1 USDC each while incorrect shares yield $0, enabling peer-to-peer settlement without intermediaries.

Technology and Infrastructure

Blockchain Integration

Polymarket is deployed on the Polygon blockchain network, a layer-2 scaling solution compatible with Ethereum that enables faster transaction processing and lower gas fees, facilitating efficient peer-to-peer trading without the high costs associated with Ethereum mainnet. This integration leverages Polygon's proof-of-stake consensus for enhanced security and decentralization, allowing the platform to handle high volumes of prediction market activity while inheriting Ethereum's robust ecosystem. The platform's smart contract architecture manages the escrowing of user funds in USDC and executes trades atomically, ensuring that buy or sell orders for yes/no outcome shares are processed as indivisible units to prevent failures or manipulations mid-transaction. These contracts automate the core mechanics of market participation, from liquidity provision to share redemption, promoting trustless operation where code enforces rules without intermediaries. Users connect to Polymarket via non-custodial wallets like MetaMask, which interface directly with the Polygon network to sign transactions while keeping private keys under user control, thereby emphasizing self-sovereignty and reducing counterparty risk. This wallet-based access supports seamless on-chain interactions, aligning with the platform's decentralized ethos by avoiding centralized custody of assets. Polymarket does not require KYC, enhancing pseudonymity through wallet addresses rather than real identities; however, it lacks privacy features to obscure trades, as all transactions occur on the public Polygon blockchain, rendering them transparent, publicly recorded, immutable, and auditable, with trading history visible and traceable via blockchain explorers.

Oracle and Data Verification

Polymarket relies on the UMA Optimistic Oracle for resolving markets that cannot be settled via automated data feeds, enabling decentralized proposals and verification of event outcomes. In this system, market resolutions begin with a proposer submitting an outcome along with a bond in USDC, which is optimistically assumed correct unless challenged during a designated window. To prevent manipulation, the protocol incorporates bond requirements that are forfeited for incorrect or disputed proposals, alongside a challenge mechanism where disputants stake their own bonds to escalate issues. If unresolved, disputes proceed to UMA tokenholder voting, where participants independently verify the outcome based on provided question data, ensuring collective decentralized consensus over single-source reliance. Ambiguous outcomes are addressed through timed dispute periods, allowing community challenges before final settlement, with escalation to UMA's governance for binding resolution if needed. This structure incentivizes accurate proposals via economic penalties while distributing verification across network participants.

Markets and Impact

Types of Events Covered

Polymarket offers prediction markets on a diverse array of events, primarily structured as binary yes/no outcomes across multiple thematic categories. Political events form a core focus, including markets on election outcomes, such as presidential races and legislative results, as well as policy decisions like regulatory changes or international agreements. Examples include markets on Trump-proposed tariffs, such as "Will Trump impose 25% tariffs on Canada and Mexico by March 31, 2025?", "Will the average US tariff rate exceed 10% in 2025?", and "60% tariffs on China in 2025", demonstrating the platform's coverage of policy outcomes with dynamic probabilities reflecting trader sentiment. Economic indicators are also prominently featured, with markets resolving based on metrics like inflation rates, GDP growth, or stock index movements. Beyond these, the platform extends to sports outcomes, cryptocurrency price thresholds, including recurring monthly Bitcoin price hit markets such as "What price will Bitcoin hit in [month]?", which resolve based on whether Bitcoin reaches specified price levels during the month, and pop culture developments, such as award winners or entertainment milestones, including prediction markets on the number of tweets posted by Elon Musk during specific weekly periods in 2026, enabling users to speculate on real-world happenings in finance, technology, and global affairs. Similar weekly tweet count markets are common on the platform for Elon Musk's activity. These monthly Bitcoin markets are created anew each period and resolve independently, with no automatic mechanism to roll over positions; users must manually participate in subsequent markets to repeat strategies.

Notable Predictions and Volume

Polymarket has recorded substantial trading volumes, particularly in election-related markets, with over $3 billion in volume during peak months like October 2025, driven by 338,000 unique traders. Aggregate volumes across political events have reached billions, reflecting heightened activity during major U.S. elections where users bet on outcomes such as presidential winners. The platform attracts professional and full-time traders, contributing to its high volumes. A prominent example is Domer, also known as JustKen, a former professional poker player who quit poker to focus on prediction markets as a full-time career. He has wagered over $400 million on Polymarket, earned nearly $3 million in profits in one year, and conducts daily research and trading across politics, sports, and other events. Polymarket's leaderboards feature other anonymous high-volume traders who have achieved multi-million dollar profits and losses, underscoring significant professional activity. In terms of forecasting, Polymarket markets have outperformed traditional polls in several instances by incorporating real-time financial incentives for accuracy, moving faster than pollster updates. For example, during the 2024 U.S. presidential election, prediction markets on the platform signaled the winner ahead of polling averages, demonstrating superior predictive power in dynamic scenarios. User participation trends show sharp increases during high-stakes events like U.S. elections, with trading volumes and trader counts surging as global users engage in binary outcome bets, underscoring the platform's role in aggregating crowd wisdom for real-world events. In early 2026, markets on potential Israeli and U.S. strikes on Iran by January 31, 2026, saw significant volumes exceeding $3 million for the Israeli strike market with implied probabilities around 30%, and $32,940,542 for the U.S. strike market with Yes shares priced at 8¢ (implying an 8% probability) and No shares at 93¢. The U.S. market resolves Yes if the US initiates a drone, missile, or air strike on Iranian soil or any official Iranian embassy. Bets included activity from wallets with prior accurate predictions on similar geopolitical events, such as a trader with a strong track record on Israeli military operations. In February 2026, Polymarket announced that the odds of Jesus Christ returning in 2026 had doubled overnight to a 4% chance, illustrating the platform's extension to unconventional and speculative events beyond traditional politics and geopolitics.

Regulation and Controversies

In January 2022, the U.S. Commodity Futures Trading Commission (CFTC) settled enforcement charges against Polymarket for operating an unregistered platform facilitating event-based binary options markets, classified as swaps under U.S. law, resulting in a $1.4 million civil monetary penalty and a cease-and-desist order. As part of the resolution, Polymarket was required to wind down all noncompliant markets and halt operations accessible to U.S. persons, leading to the implementation of geoblocking that restricted American users from participating on the platform. To navigate varying global regulations, Polymarket employs geoblocking and adheres to international sanctions, prohibiting access in certain sanctioned regions to ensure compliance with local laws; following regulatory clearance in September 2025, US access restrictions were lifted in December 2025. While specific KYC requirements are applied selectively based on jurisdictional demands, the platform's decentralized structure aims to minimize intermediaries, though it has pursued partnerships and approvals, such as with regulated entities, to facilitate compliant access in permitted areas. Prediction markets like Polymarket have sparked regulatory debates over their classification, with critics viewing them as akin to gambling due to the speculative nature of betting on outcomes, subjecting them to federal oversight by bodies like the CFTC as event contracts rather than state-level gaming rules. Proponents, however, emphasize their role in aggregating dispersed information for accurate forecasting, arguing that they function more as efficient discovery mechanisms than pure wagering, potentially warranting lighter regulation to harness their predictive value over traditional polls or expert analyses.

Significant Trading Incidents

A notable trading incident on Polymarket occurred in January 2026 when the trader ricosuave666, inactive for seven months, returned and placed a bet of $8,198 on Israel striking Iran by late January, contributing to market odds reaching 38% for such an event. This trader had previously achieved profitability on all Israel-related bets during periods of regional escalation. The bet exemplified how whale activity—large individual trades—can exert short-term pressure on liquidity in niche geopolitical markets, temporarily elevating probabilities before broader trading adjusts them. Community discussions, fueled by the trader's track record, highlighted these dynamics without evidence of misconduct. In early January 2026, Polymarket resolved the "U.S. Invasion of Venezuela" market as "No," withholding payouts on over $10.5 million in bets after determining that the U.S. military operation, including the capture of Nicolás Maduro, did not constitute an "invasion" under the market's criteria. Resolution was handled via the UMA protocol, with Polymarket citing adherence to predefined rules, unmet deadlines, and its non-custodial structure. Users expressed backlash, criticizing the strict interpretation, though the platform maintained the decision followed established procedures. In the same period, a trader wagered approximately $32,000 on a market predicting the capture or ousting of Nicolás Maduro shortly before the U.S. military operation that led to his seizure, profiting around $400,000. The timing of the bet raised suspicions of insider trading using non-public information, though such practices are not explicitly illegal in prediction markets. The incident drew scrutiny and prompted legislative responses, including a bill proposed by Rep. Ritchie Torres to prohibit government officials from trading on insider information in prediction markets. In early January 2026, a newly created Polymarket account placed a large bet, reported between $40,000 and $250,000, on "Yes" for the market "Will the U.S. strike Iran by Jan 14, 2026?", with no other activity on the account. Users speculated that it indicated insider knowledge of an imminent U.S. military action against Iran, leading to widespread discussion and some copycat bets. The bet lost value as the deadline passed without a strike, prompting claims it was a failed gamble, hedge, or manipulation tactic. Other significant events include substantial whale positions that influenced volatile markets, such as a trader losing over $2 million across multiple bets in just 35 days, underscoring the risks and scale of high-conviction plays in prediction outcomes. These incidents demonstrate Polymarket's sensitivity to concentrated trading volumes, often amplifying price swings in lower-liquidity event categories.

References

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