In this guide
Key takeaway: Polymarket is a decentralised prediction market where participants acquire YES/NO shares on actual events using USDC on the Polygon blockchain. Automated smart contracts manage all settlement procedures.
How does Polymarket work? Fundamentally, Polymarket functions as a prediction exchange: rather than wagering against a bookmaker's built-in edge, you exchange positions with other market participants who hold differing views on outcomes. Market prices represent the aggregate probability assessment of the entire participant base — continuously refreshed as fresh information emerges.
The basics: prediction markets
A prediction market enables you to acquire shares representing specific outcomes. Each share yields $1 upon YES resolution, or $0 upon NO resolution. Should you acquire a YES share priced at 40 cents ($0.40), you're expressing a 40% likelihood of that event materialising. Success doubles your capital; failure forfeits your investment.
Polymarket operates differently from conventional bookmakers in that it imposes no margin (the "vig"). Prices emerge purely through the interplay of buyer and seller demand across the trading population.
How Polymarket uses blockchain
Polymarket operates atop the Polygon blockchain (a layer-2 scaling solution built atop Ethereum). This architecture delivers:
- Full on-chain transparency and auditability of all activity
- Autonomous smart contracts governing fund management, order execution, and settlement payouts
- Elimination of centralised control — Polymarket operators cannot seize assets or alter resolution outcomes
- Near-instantaneous settlement in lieu of multi-day clearing cycles
USDC: the currency of Polymarket
Polymarket exclusively employs USDC (USD Coin), a stablecoin maintaining a 1:1 correspondence with the US dollar. Trading participants avoid cryptocurrency price volatility — 1 USDC perpetually equals $1 in value.
How markets resolve
Upon determination of an event's outcome, Polymarket engages the UMA Oracle (Universal Market Access) to finalise market settlements. A designated "proposer" submits the determined outcome; a 2-hour challenge period permits objections; absent disputes, settlement becomes irreversible. Contested resolutions escalate to UMA token-holder arbitration — a decentralised dispute resolution mechanism.
Getting started on Polymarket
- Create an account — register via email and fulfil KYC verification requirements
- Deposit USDC — utilise MoonPay, direct bank transfer, or transfer from an existing cryptocurrency wallet
- Browse markets — explore offerings spanning politics, athletics, blockchain, entertainment and additional categories
- Buy shares — select YES or NO and specify your investment amount
- Track and exit — liquidate your holdings whenever before the resolution date
PolyGram streamlines this workflow via a mobile-optimised platform and passwordless email authentication. Start trading on PolyGram →
Why Polymarket prices are accurate
Prediction markets have repeatedly demonstrated superior forecasting performance relative to conventional polling methodologies and specialist commentary. Throughout the 2024 US election period, Polymarket's probability assessments outperformed most leading polling indices. The mechanism: financial incentives compel participants toward rigorous, unbiased evaluation.