How Does Polymarket Work? A Beginner's Guide

Jesse M. Cox Chief Editor

Fact checked by:
Mike Goodpaster Last Verified
19/06/2026

Polymarket is a prediction market exchange where you trade Yes/No contracts on real-world outcomes. Politics, sports, crypto prices, Fed rate decisions, weather, culture — if it has a measurable outcome, there is probably a market for it. Each contract costs between $0.01 and $0.99, and the price tells you what traders collectively think the probability of the outcome is.

This guide covers what Polymarket is, how its contracts work, a worked example, what you can trade, and how to get started — including the key things that make Polymarket different from other prediction market platforms.

What Is Polymarket?

Polymarket started as a global, crypto-native prediction market built on the Polygon blockchain. For years it was one of the largest prediction markets in the world, but it was unavailable to US users following a 2022 CFTC settlement in which it paid a $1.4 million penalty for operating without proper registration.

The return to the US came through a $112 million acquisition of QCX LLC, a CFTC-licensed Designated Contract Market (DCM), in mid-2025. By December 2025, Polymarket US had its Amended Order of Designation from the CFTC, and it officially relaunched for all US users in May 2026 with a dedicated iOS app. The entity operating in the US is QCX LLC, doing business as Polymarket US, and it carries the same federal regulatory status as Kalshi and the other major CFTC-regulated prediction market platforms.

The trading currency on Polymarket is USDC, a stablecoin pegged to the US dollar. This makes Polymarket meaningfully different from other US platforms like Kalshi — you fund your account with crypto rather than through a bank transfer or debit card, which has implications for how you deposit, withdraw, and think about the product. More on that below.

How Polymarket Event Contracts Work

Every market on Polymarket is structured around a question with a clear Yes or No answer. "Will the Philadelphia Eagles win Super Bowl LXI?" or "Will the Fed cut rates at its next meeting?" Each question has two sides — a Yes contract and a No contract — and you take whichever side you agree with.

Contract prices run from $0.01 to $0.99 USDC, and at any moment the Yes and No prices add up to roughly $1. A Yes contract trading at $0.72 means the market currently prices the outcome at a 72% probability. The price is not set by Polymarket — it is set by the collective buying and selling pressure of every trader in the market.

At resolution, each winning contract pays out exactly $1 USDC and each losing contract pays $0. Settlement is handled by UMA's Optimistic Oracle, a decentralized resolution system with a dispute path that can escalate for contested outcomes. Every market has clearly published resolution criteria that define exactly what counts as a Yes or No — reading those criteria before trading is worth doing, especially in markets where edge cases can matter. Our broader explainer on what event trading is covers the mechanics in more detail.

Like any exchange, Polymarket runs on a central limit order book (CLOB). The prices you see — green for Yes, red for No — reflect the mid-point between the best available bid and ask prices. You can place a market order to fill immediately at the best available price, or a limit order to sit on the book at the price you want and wait for another trader to match it.

A Worked Example

Polymarket is running a market: "Will France win the 2026 FIFA World Cup?" The Yes contract is trading at $0.16 — reflecting a 16% implied probability.

You follow international soccer closely and think France's chances are better than that. You buy 300 Yes contracts at $0.16 each. Your total cost is $48 USDC, plus any applicable fee.

1. Scenario 1: France wins the World Cup. The contract resolves Yes and settles at $1.00. Your 300 contracts return $300 USDC. Your profit is $252 minus fees — a significant return on a position you held at what you considered an underpriced probability.
2. Scenario 2: France is eliminated. The contract settles at $0. Your $48 USDC is gone.
3. Scenario 3: France reaches the final, the market reprices. As France wins each knockout round, sentiment shifts and the Yes contract climbs to $0.55. You sell your 300 contracts at the new price, receiving $165 USDC — a $117 profit without waiting for the final to be played.

That third path matters. Unlike a traditional futures contract, you are not locked in. If the market moves in your favor at any point before resolution, you can exit early and take the gain. If the news turns against you, you can cut the position rather than riding it to zero.

How Polymarket Prices Move

Prices on Polymarket move the way prices move on any exchange — through supply and demand. When more traders are buying Yes than selling it, the Yes price rises. When sentiment flips, it falls. There is no algorithm and no house view; the market is the aggregate of what every active trader is willing to pay.

In high-volume markets like presidential elections or major Bitcoin price thresholds, the order book tends to be deep and the spread between bid and ask is tight, making it easy to get in and out cleanly. In thinner markets, the spread can widen, which is effectively a hidden cost of execution. Checking the order book before placing a large trade is worth the extra few seconds, especially if you are using market orders that fill at whatever prices are available.

Polymarket displays the price as the mid-point between best bid and best ask. If the spread becomes unusually wide, the platform falls back to showing the last traded price instead, which gives a clearer sense of where the market last agreed.

What You Can Trade on Polymarket

Polymarket's market coverage is broad. The US-regulated platform launched with a sports-first focus, but it has expanded steadily and now covers most of what the global Polymarket catalog offers.

Polymarket's Fee Structure

Polymarket US uses a formula-based fee on trades rather than a flat rate. The formula is: Fee = θ × C × p × (1 − p), where C is the number of contracts, p is the contract price, and θ is the fee coefficient — 0.05 for takers (orders that fill immediately against existing orders) and −0.0125 for makers (orders that sit on the book and are filled by someone else).

In practice, this means fees are highest when the price is close to $0.50, where uncertainty and liquidity are greatest, and fall toward the extremes. The maximum taker fee for 100 contracts is $1.25. Makers receive a rebate worth 25% of the corresponding taker fee, which creates an incentive to place limit orders rather than market orders.

Deposits and withdrawals from Polymarket itself carry no fee, but third-party costs apply depending on how you fund the account. MoonPay charges fees for buying USDC by card, and crypto network gas fees apply for blockchain transactions. For a comparison of how this fee model compares to other platforms, see our breakdown of prediction markets vs sportsbooks.

How Deposits Work on Polymarket

Polymarket's funding model is the biggest adjustment for users coming from Kalshi or other dollar-based platforms. Every balance on Polymarket is held in USDC, a stablecoin pegged to the US dollar and built on the Polygon blockchain. You never deposit dollars directly into Polymarket — you deposit USDC.

There are a few ways to get USDC into your Polymarket account. The most straightforward is transferring USDC directly from a crypto exchange like Coinbase. Alternatively, you can buy USDC within the Polymarket app using a debit card (Visa or Mastercard) or bank account through MoonPay, Polymarket's integrated on-ramp provider. Polymarket supports deposits from multiple chains — Polygon, Ethereum, Arbitrum, Base, and Solana — and automatically bridges them to USDC on Polygon.

The minimum deposit for the welcome bonus is $20. The platform minimum is $1, though very small deposits may not be practical given gas fees. Daily deposit limits are generous: $50,000 for debit card, Apple Pay, and online banking; wire transfers have no listed limit but carry a $5,000 minimum.

Withdrawals work in reverse: you receive USDC to a wallet address, which you can then convert to dollars at a crypto exchange if you prefer fiat currency. Polygon withdrawals settle in seconds. Polymarket also supports Hop transfers for moving USDC to other Ethereum addresses quickly.

How to Sign Up for Polymarket

Polymarket is available to US residents 18 or older in 49 states, with Nevada currently excluded. The iOS app launched in May 2026; Android access and full web trading are also available.

1. Download the app or open the site: Get the Polymarket iOS app from the App Store, or go to polymarket.com on a desktop browser.
2. Create an account: Sign up with email. Polymarket also supports social sign-in options. Enter your legal name, date of birth, and residential address.
3. Complete identity verification (KYC): Submit a government-issued photo ID. US users go through standard identity verification under federal KYC rules before any trading or withdrawal is available.
4. Fund your account with USDC: Choose your funding method — transfer USDC from a crypto exchange like Coinbase, or use MoonPay to buy USDC with a debit card or bank account. Enter a promo code at sign-up to activate the welcome bonus.
5. Find a market: Use the category toolbar (Sports, Politics, Crypto, Economy, Culture) or browse Trending, Breaking, or New markets. You can also search for a specific event.
6. Place your first trade: Open a market, select Yes or No, enter your position size in contracts or dollars, choose market or limit order, review the fee and potential payout, and confirm.

Polymarket vs Kalshi: The Key Differences

Both platforms are CFTC-regulated DCMs trading binary event contracts. The mechanics are the same at a high level. But the day-to-day experience is quite different, and for many US users the choice between them comes down to a few specific things.

Funding is the most obvious difference. Kalshi works with dollars — ACH bank transfers, debit cards, PayPal, Venmo — and feels like a conventional financial app. Polymarket is crypto-native: you hold USDC, everything lives on the Polygon blockchain, and cashing out requires converting USDC back to dollars at a third-party exchange. That is a meaningful extra step if you are not already set up in the crypto ecosystem.

Market depth is where Polymarket stands out. Its global political markets, geopolitics coverage, and crypto markets tend to have deeper liquidity than Kalshi's equivalents, reflecting the platform's longer history in those categories. For US-specific sports markets, the two platforms are increasingly comparable. Kalshi pays 3.95% APY on idle cash balances; Polymarket does not. Kalshi offers ACH and PayPal as zero-fee deposit methods; Polymarket's fiat on-ramp goes through MoonPay which charges its own fees. For a detailed side-by-side, our Kalshi vs Polymarket guide covers the comparison in full.

The Bottom Line on How Polymarket Works

Polymarket is a peer-to-peer exchange for binary event contracts — Yes or No positions on real-world outcomes, priced by supply and demand, settled at $1 or $0. The price you see is the market's implied probability, and you can buy, hold, or sell at any point before resolution. Funding is USDC-based, which requires some familiarity with crypto wallets and stablecoins, but the trading mechanics themselves are straightforward once you understand how the order book works.

The platform's strongest suit is market breadth. Politics, geopolitics, tech, and culture markets in particular go deeper and wider than most other US-regulated platforms. Sports coverage is solid and expanding. For a full platform assessment covering fees, liquidity, app experience, and overall verdict, see our full Polymarket review.

Polymarket FAQ