Merging is the process of converting 1 YES share and 1 NO share in the same market back into 1 USDC. It’s the reverse of splitting, and it can only happen before a market resolves.
Merging is a capital management tool, not a trading move. It doesn’t affect your exposure to any outcome — it simply lets you recover locked USDC when you hold both sides of a position.
How Merging Works
When you merge, you call the mergePositions() function on Polymarket’s Conditional Token Framework (CTF) smart contract. The contract:
- Takes 1 YES token and 1 NO token for the specified market from your wallet
- Burns both tokens
- Returns 1 USDC to your wallet
The USDC comes from the escrow held since those tokens were originally created (via a split). Like splitting, merging is fee-free — you only pay Polygon gas.
You cannot merge after a market has resolved. Once resolved, only the winning token has value ($1 USDC per share), and the losing token is worthless. Post-resolution, you redeem — not merge.
Merging vs. Redeeming: The Key Difference
These two operations are easy to confuse but are fundamentally different:
| Merging | Redeeming | |
|---|---|---|
| Timing | Before resolution | After resolution |
| Tokens required | 1 YES + 1 NO | 1 winning token only |
| Result | 1 USDC | 1 USDC |
| Fee | None | None |
| When to use | You hold both sides and want capital back | You won and want to claim your winnings |
Merging is proactive capital management. Redeeming is collecting your winnings.
When Merging Is Useful
You’ve Accumulated Both Sides Through Trading
This is the most common real-world scenario. Imagine:
- You buy YES shares at $0.40 — you think the probability is higher than 40%
- Later, the price moves up to $0.70, and you think it’s now overpriced
- Instead of selling your YES, you buy NO shares at $0.30
- You now hold YES at $0.40 + NO at $0.30 = $0.70 total cost
- Merging returns $1.00 USDC — a $0.30 profit with zero further market exposure
Rather than waiting for one side to play out, merging lets you lock in the profit immediately and redeploy the USDC.
I use this when I’ve built up a position that’s become roughly balanced. If I’m holding YES at an average cost of $0.45 and I can buy NO at $0.50 or less, the merge is profitable — and more importantly, it frees up capital rather than leaving it locked in a position I’ve lost conviction on.
Market Making and Liquidity Provision
Market makers accumulate both YES and NO inventory naturally — that’s the job. Merging is how they recycle capital: take inventory built up from both sides, merge it into USDC, and deploy it back into the order book.
Without the merge operation, market makers would have capital permanently locked in position tokens, unable to return it to liquid form until resolution.
Closing a Hedge
If you took a directional position and later hedged with the opposite side (buying NO after being long YES, or vice versa), merging cleanly closes both positions at once rather than selling each side separately on the market.
The Capital Efficiency Argument
Consider two approaches to closing a balanced position:
Option A — Sell both sides:
- Sell YES at the current bid (e.g., $0.69)
- Sell NO at the current bid (e.g., $0.29)
- Total received: $0.98 (you paid spread on both)
Option B — Merge:
- Merge YES + NO → 1 USDC
- Total received: $1.00 (no spread cost)
Merging is almost always more capital-efficient than selling both sides on the market, because you don’t pay the bid-ask spread twice.
The only time selling is better is if the current market prices are favorable enough that you can sell both sides above their fair value — which typically doesn’t happen unless you’re providing liquidity, not taking it.
How to Merge on Polymarket
The merge function is accessible through the Polymarket portfolio or market detail pages. Look for a “Merge” option when viewing your positions in a market where you hold both YES and NO shares.
Like splitting, merging isn’t prominently featured in the UI because it’s primarily used by advanced traders. Most casual traders never need to merge — they simply buy one side and hold until resolution.
Learn More
- Splitting on Polymarket — The reverse: USDC into YES + NO shares
- How Markets Resolve on Polymarket — Claiming your winnings after resolution
- Converting and Negative Risk Markets — Multi-outcome market management
- Market Making on Polymarket — Strategy that heavily uses split and merge