In this guide
Key takeaway: Polymarket is a decentralised prediction market where traders buy YES/NO shares on real-world events using USDC on the Polygon blockchain. Smart contracts handle all settlements automatically.
How does Polymarket work? Fundamentally, Polymarket operates as a prediction marketplace: rather than wagering against a bookmaker's built-in margin, participants trade directly with one another based on differing views of future outcomes. The market price continuously adjusts to reflect participants' collective probability assessment — shifting instantly as new information emerges.
The basics: prediction markets
In a prediction market, you acquire shares representing possible outcomes. Each share is worth $1 upon a YES resolution, or $0 upon a NO resolution. Purchasing a YES share for 40 cents ($0.40) signals your belief that the event has a 40% likelihood of occurring. A correct prediction doubles your initial investment. An incorrect one results in total loss of capital.
Polymarket differs from conventional bookmakers in that it operates without a house margin (the "vig"). Market prices emerge entirely through the interplay of buyer and seller activity.
How Polymarket uses blockchain
Polymarket operates atop the Polygon blockchain (a layer-2 solution layered over Ethereum). This architecture delivers several advantages:
- Every transaction remains visible and auditable through the distributed ledger
- Automated code manages account funding, order execution, and fund distribution
- Polymarket operators cannot restrict access to assets or alter settlement results
- Payouts complete within minutes rather than weeks
USDC: the currency of Polymarket
Trading exclusively occurs in USDC (USD Coin), a stablecoin maintaining a fixed 1:1 ratio with the US dollar. Your trading balance remains insulated from cryptocurrency price swings — one USDC consistently equals one dollar.
How markets resolve
Upon an event's conclusion, Polymarket employs the UMA Oracle (Universal Market Access) to finalise market outcomes. An authorised party proposes the result; a 2-hour challenge period follows; absent objections, settlement becomes binding. Should disputes arise, UMA token holders participate in a decentralised resolution process.
Getting started on Polymarket
- Create an account — register via email and satisfy identity verification requirements
- Deposit USDC — fund your account through MoonPay, direct bank transfer, or existing cryptocurrency holdings
- Browse markets — explore offerings spanning elections, athletics, digital assets, entertainment and beyond
- Buy shares — select YES or NO and specify your investment amount
- Track and exit — liquidate holdings whenever you choose prior to market conclusion
PolyGram streamlines this workflow through an intuitive mobile platform and passwordless authentication. Start trading on PolyGram →
Why Polymarket prices are accurate
Prediction markets have repeatedly demonstrated superior forecasting performance relative to conventional opinion surveys and specialist analysis. Throughout the 2024 US election cycle, Polymarket's probability assessments outperformed the majority of prominent polling indices. The mechanism is straightforward: financial incentives compel participants to form unbiased judgements.