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 placing wagers against a bookmaker's built-in edge, you exchange positions with other participants who hold opposing views. Market prices continuously shift to represent the aggregate probability assessment held by the trading community — adjusting instantly as fresh information emerges.
The basics: prediction markets
In a prediction market, you acquire shares representing specific outcomes. Each share is worth $1 upon YES resolution, or $0 upon NO resolution. When you acquire a YES share for 40 cents ($0.40), you're expressing a 40% probability for that result. Success means your capital doubles; failure means your capital disappears.
Polymarket differs from conventional bookmakers by operating without a built-in spread (the "vig"). Participants themselves determine pricing through their collective buying and selling activity.
How Polymarket uses blockchain
Polymarket operates atop the Polygon blockchain (a layer-2 scaling solution extending Ethereum). This architecture delivers:
- Complete on-chain transparency and auditability of every transaction
- Automated execution of funding, trading, and reward distribution via smart contracts
- Elimination of counterparty risk — Polymarket operators cannot seize assets or alter results
- Near-instantaneous settlement instead of multi-day clearing cycles
USDC: the currency of Polymarket
Trading activity on Polymarket exclusively utilises USDC (USD Coin), a stablecoin maintaining a constant 1:1 exchange rate with the US dollar. Your account value remains insulated from cryptocurrency price swings — each USDC token perpetually equals one dollar.
How markets resolve
Upon determination of an event's actual outcome, Polymarket leverages the UMA Oracle (Universal Market Access) for market settlement. An appointed proposer furnishes the resolved outcome; a 2-hour challenge period follows; absent objections, settlement becomes binding. Should disputes arise, UMA token holders render the final determination through decentralised voting.
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 via a mobile-optimised platform and passwordless email authentication. Start trading on PolyGram →
Why Polymarket prices are accurate
Prediction markets have repeatedly surpassed traditional polling methodologies and specialist opinion in forecast precision. Throughout the 2024 US election campaign, Polymarket's probability assessments demonstrated superior accuracy relative to leading polling organisations. The mechanism driving this edge: financial incentives compel participants toward genuine probability assessment rather than wishful thinking.