How Does Polymarket Work? Fees, Mechanics & Revenue

Polymarket is a prediction market where you buy and sell YES or NO shares on real-world events. Prices range from $0.00 to $1.00 and reflect the market’s probability — a $0.65 share implies a 65% chance. Orders match off-chain, settle on-chain, and winning shares pay $1.00.

How Polymarket Works Step by Step

Trading on Polymarket follows the same sequence every time.

1. Choose a market. Every market is a yes/no question — “Will the Fed cut interest rates in June 2026?” or “Will Bitcoin exceed $150,000 by December 2026?”. Markets are grouped by category (politics, sports, crypto, and more), and each one carries written resolution rules that define exactly what counts as YES.
2. Read the price. Shares trade between $0.00 and $1.00, and the price is the market’s estimated probability. A YES share at $0.65 means the crowd prices a 65% chance the event happens. YES and NO prices always add up to $1.00.
3. Place an order. Use a market order to fill immediately at the best available price, or a limit order to name your own price and wait to be matched. The minimum trade is $1, and limit orders need at least 5 shares.
4. Trade in and out. You are not locked in until resolution. Buy YES at $0.40, sell at $0.70 after favorable news, and you’ve locked in a 75% return on your stake — no need to wait for the event to happen.
5. Redeem at resolution. When the market resolves, winning shares pay $1.00 each and losing shares expire at $0.00. Auto-redeem (Settings → Trading) credits the payout automatically, or you can sell before resolution to lock in a profit.

Shares are ERC-1155 tokens on Polygon, and Polymarket is non-custodial — your positions sit in your own wallet rather than on a company balance sheet.

This page explains Polymarket’s product specifically. For the underlying theory of prediction markets as a category — how share pricing works, multi-outcome markets, and why their prices forecast so well — see How Prediction Markets Work.

The Order Book: Hybrid Matching, On-Chain Settlement

Every trade goes through an order book, just like a stock exchange. The design is hybrid: orders are matched off-chain by Polymarket’s matching engine, and only the settlement happens on-chain on Polygon. (You’ll see it described elsewhere as an “on-chain order book” — that’s not accurate. The matching is off-chain.)

• Market orders fill immediately against the best resting price. In thin markets they can fill at worse prices, so check the book first.
• Limit orders name your price and wait for a counterparty. They add liquidity to the book, and Polymarket charges makers $0 — plus a share of collected taker fees back through the Maker Rebates Program.

When the event resolves, winning shares auto-redeem at $1.00 and losing shares expire worthless. Resolution runs through UMA’s optimistic oracle: a proposer posts an outcome, a challenge window runs, and a disputed market escalates to a token-holder vote. How Polymarket Markets Resolve walks through that timeline.

How Polymarket Fees Work

Polymarket charges takers — the trader who fills an existing order — and never charges makers. The taker fee follows a single formula:

fee = C × feeRate × p × (1 − p)

C is the number of shares, p is the share price, and feeRate depends on the market’s category. Two consequences matter:

• The fee amount peaks at 50% probability and falls away toward $0.00 and $1.00 as an outcome becomes more certain.
• Fees round to five decimal places, and the smallest fee charged is 0.00001 — so very small trades near the extremes may pay no fee at all.

There are no Polymarket fees to deposit or withdraw. For the full breakdown — with worked examples and the maker rebate — see Polymarket Fees Explained, or run your own numbers through the fee calculator.

How Does Polymarket Make Money?

Polymarket’s own revenue comes from trading fees. Every matched taker order pays a fee, and the platform keeps it. There is no subscription, no deposit fee, and no withdrawal fee. Because the fee curve is category-based and peaks at 50% probability, revenue scales with trading volume — and with how much genuine uncertainty a market carries. A busy, genuinely close market generates more fee revenue than a quiet, lopsided one.

A second flow runs through the referral program. Polymarket pays affiliates 10% of net trading fees on direct referrals and 5% on indirect referrals. “Net” means what Polymarket keeps after the referred user’s own tier rebate — not the gross fee. An affiliate needs $10,000 in lifetime volume to earn. Payouts land daily at midnight UTC in pUSD, and a referral stops earning at whichever comes first: the referred user reaching Platinum tier, or 30 days after they sign up.

Alongside that, Polymarket runs several programs that pay money back to traders:

• Maker Rebates — funded by the taker fees collected in eligible markets, paid daily in pUSD ($1 minimum).
• Taker Rebate Program — tiered rebates from 0% to 50%, based on 30-day weighted trading volume.
• Holding Rewards — 3.25% annualized on position value in eligible markets, sampled hourly and paid daily.
• Liquidity Rewards — for resting limit orders, paid daily.

None of these change the headline model: Polymarket earns trading fees, and the programs redistribute part of what takers pay.

StartPolymarket is independent and not affiliated with Polymarket. We explain how the platform works — we don’t tell you what to trade.

What Can You Trade on Polymarket?

Polymarket covers a broad range of categories:

Markets are created by the Polymarket team. Users cannot currently create their own markets, though the team consistently adds new markets based on current events and user demand.

More Specific Than Any Stock Trade

The categories table undersells what makes Polymarket interesting: the specificity of the bets. After three years of trading here, this is the thing I’d struggle to replace with any other platform.

Say you think the Strait of Hormuz is likely to close. The stock-market version of that view is buying shares in an oil company — and hoping the correlation between your thesis and the share price holds up through earnings reports, management decisions, and everything else that moves a stock. On Polymarket, you can trade the actual event: whether the strait closes — or even how many ships transit it in a given period. No proxy, no correlation risk, just your read on the event itself.

That precision exists across thousands of markets at any given time. If you have a genuinely informed view on something specific happening in the world, there is usually a market that lets you express exactly that view — which is something neither a sportsbook nor a brokerage can offer.

Why People Use Polymarket

As an Information Tool

Prediction markets are consistently among the most accurate forecasting tools available. Because traders risk real money, prices reflect genuine conviction — not wishful thinking, pundit speculation, or poll methodology quirks.

Polymarket’s election markets are regularly cited by major news outlets and analysts as leading indicators. During the 2024 US presidential election, Polymarket’s prices were among the most accurate predictors of the outcome.

When you check Polymarket, you’re seeing what thousands of people with money on the line actually believe will happen — not what they hope or what a poll says.

This is also why many traders (myself included) treat Polymarket as a news source in its own right. News outlets have a structural bias: they’re selling a story, and dramatic framing sells better than calibrated probability. Polymarket traders have exactly one incentive — to be right — because being wrong costs them money. The result is that the odds are often a more honest summary of a developing situation than the coverage of it. I check Polymarket to understand the news at least as often as I check it to trade.

As a Trading Platform

For traders, Polymarket offers advantages over both traditional sports betting and stock markets:

• Better odds — Prices are set by the market, not a bookmaker. Spreads are tighter.
• Lower fees — Max taker fees from $1.00 to $1.75 per 100 shares, geopolitics free, compared to 5-15% margins at traditional sportsbooks (calculate your fees)
• Real-time trading — Buy and sell positions instantly as events unfold
• No KYC — Start trading in under 2 minutes with just an email or Google account
• Global access — Available in 100+ countries

Key Facts About Polymarket

Polymarket International vs. Polymarket US

There are two separate Polymarket platforms, and they are completely different:

This site focuses exclusively on Polymarket International — the open-access global platform. When we say “Polymarket,” we mean the international exchange.

Getting Started

Getting started on Polymarket takes three steps:

1. Create Your Account

Sign up in under 2 minutes with a Google account, email address, or crypto wallet. No identity verification required.

Full walkthrough: How to Sign Up for Polymarket

2. Deposit Funds

Deposit crypto from any wallet (100+ tokens, 13 chains) or connect Coinbase. Minimum deposit is just $3 on most chains.

Full walkthrough: How to Deposit on Polymarket

3. Start Trading

Browse markets, find an event you have a view on, and buy Yes or No shares. You can start with as little as $1 per trade.

The One Mistake Every Beginner Makes

Before you place your first trade: read the market’s rules, not just its title.

Every market has resolution rules — the precise criteria that determine what counts as YES. Most of the time the rules say what the title implies. But edge cases exist where they don’t: a deadline that’s earlier than you’d assume, a specific data source that differs from the headline number, a definition of “officially announced” that excludes a tweet. When the title and the rules diverge, the rules always win. I’ve watched traders lose money on markets they’d called correctly in spirit, because the rules defined the outcome differently than the title suggested.

It takes thirty seconds to read the rules and it’s the single highest-value habit a new trader can build. For how those rules get enforced at resolution time, see How Polymarket Markets Resolve.

Is Polymarket Legal?

Polymarket operates as a decentralized prediction market and is not regulated by any single financial authority. It is legal to use in 100+ countries, and is not fully usable in 50 — 14 blocked (no new orders and, on the most restrictive OFAC blocks, existing positions can’t be closed) and 34 close-only (you can close existing positions but cannot open new ones). Blocked countries include Iran, Syria, Cuba and North Korea under OFAC sanctions, and the government-ISP-blocked countries (e.g. Argentina, Spain, France, Brazil, Portugal, South Korea). Close-only countries include the United States and US Minor Outlying Islands.

The restrictions are based on IP address. Check if Polymarket is available in your country.

Is Polymarket Safe?

Polymarket has been operating since 2020 and has processed billions of dollars in trading volume. Key security facts:

• Smart contract execution — Trades execute on the Polygon blockchain, not on Polymarket’s servers
• Non-custodial elements — Your positions are recorded on-chain
• Prominent backing — ~$2.8 billion raised, including $2 billion from Intercontinental Exchange (parent of the NYSE) — see Who Owns Polymarket?
• No KYC = no personal data risk — Polymarket doesn’t store identity documents
• Track record — 5+ years of continuous operation

That said, all trading involves risk. Prediction markets can move quickly, and you can lose your entire position if your prediction is wrong. Only trade with money you can afford to lose.

Learn More

• All Learning Articles — Browse every educational article
• How to Sign Up for Polymarket — Create your account in under 2 minutes
• How to Deposit on Polymarket — Fund your account step by step
• How to Trade on Polymarket — Place your first trade with market or limit orders
• How to Sell on Polymarket — Take profits or cut losses before resolution
• How to Withdraw from Polymarket — Cash out your winnings
• Polymarket Fees Explained — Complete breakdown of the fee structure
• Who Owns Polymarket? — The company, funding, and founder behind the platform
• How Prediction Markets Work — The theory behind prediction markets
• Polymarket Review 2026 — Our in-depth review after 3 years of trading
• Polymarket vs Kalshi — How Polymarket compares to its main competitor
• Is Polymarket Available in Your Country? — Check access for your location