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 functions as a prediction marketplace: rather than wagering against a bookmaker's built-in edge, you exchange positions with other participants who hold opposing views. The market price continuously reflects what the broader community believes is the probability of an outcome — shifting instantly as fresh information emerges.
The basics: prediction markets
Prediction markets allow you to acquire shares representing specific outcomes. Each share is redeemable for $1 upon a YES resolution, or worthless if the event resolves NO. Purchasing a YES share at 40 cents ($0.40) signals your belief that a 40% probability exists for that outcome. Success means your capital doubles; failure means forfeiting your investment.
Polymarket operates differently from conventional bookmakers in that it imposes no margin (the "vig"). Market participants alone determine pricing through their collective buying and selling activity.
How Polymarket uses blockchain
Polymarket operates atop the Polygon blockchain (a layer-2 scaling solution layered on top of Ethereum). This architecture delivers:
- Complete transparency and verifiability of all activity recorded on-chain
- Automated execution of funding, trading, and settlement via smart contracts
- Elimination of the risk that Polymarket operators could seize assets or alter results
- Near-instantaneous resolution rather than multi-day processing delays
USDC: the currency of Polymarket
Polymarket exclusively utilises USDC (USD Coin), a stablecoin maintaining a fixed 1:1 exchange rate with the US dollar. Your trading balance remains insulated from cryptocurrency price swings — one USDC consistently equals one dollar.
How markets resolve
Upon confirmation of an event's outcome, Polymarket leverages the UMA Oracle (Universal Market Access) to finalise market settlements. An individual "proposer" declares the outcome; a 2-hour challenge period follows; absent objections, the settlement becomes binding. Markets facing challenges proceed to a vote among UMA token holders — a transparent, community-driven resolution mechanism.
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 by transferring from another cryptocurrency wallet
- 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 your holdings whenever you choose prior to market closure
PolyGram streamlines this workflow through an app-optimised design and passwordless email authentication. Start trading on PolyGram →
Why Polymarket prices are accurate
Prediction markets consistently surpass conventional polling methodologies and specialist opinion in forecast precision. Throughout the 2024 US election cycle, Polymarket's probability assessments demonstrated superior accuracy relative to leading polling organisations. The mechanism driving this superiority: financial incentives compel participants to form unbiased judgements about likelihood.