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. Market prices continuously shift to reflect what the broader community believes will occur — these valuations update instantly as fresh information emerges.
The basics: prediction markets
In a prediction market, you acquire shares representing specific outcomes. Each share yields $1 upon YES resolution, or $0 if the event resolves NO. When you acquire a YES share for 40 cents ($0.40), you're implicitly estimating a 40% likelihood of that outcome occurring. Success means your capital doubles; failure means your investment is forfeited.
Polymarket operates differently from conventional bookmakers in that it imposes no built-in margin (the "vig"). Prices emerge organically from what buyers and sellers are willing to transact at.
How Polymarket uses blockchain
Polymarket operates atop the Polygon blockchain (a layer-2 scaling solution layered above Ethereum). This architecture delivers several advantages:
- Every transaction remains visible and auditable across the distributed ledger
- Automated protocols manage account funding, order execution, and reward distribution
- The Polymarket organisation cannot seize assets or alter settlement outcomes
- Payouts occur within minutes rather than weeks
USDC: the currency of Polymarket
Polymarket exclusively employs USDC (USD Coin), a stablecoin maintaining a consistent 1:1 exchange rate with the US dollar. Your trading balance remains insulated from cryptocurrency price swings — one USDC perpetually equals one dollar.
How markets resolve
Once an event's result becomes public knowledge, Polymarket leverages the UMA Oracle (Universal Market Access) to finalise market settlements. An "oracle proposer" reports the outcome; a 2-hour challenge period follows; absent objections, settlement becomes binding. Contested resolutions escalate to UMA token holders for decentralised arbitration.
Getting started on Polymarket
- Create an account — register via email and undergo identity verification
- Deposit USDC — fund your account through MoonPay, direct bank transfer, or existing cryptocurrency holdings
- Browse markets — explore political contests, athletic competitions, blockchain developments, 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 conclusion
PolyGram streamlines this workflow through an optimised mobile experience and passwordless authentication. Start trading on PolyGram →
Why Polymarket prices are accurate
Prediction markets have repeatedly demonstrated superior forecasting power relative to conventional polling and specialist commentary. Throughout the 2024 US election period, Polymarket's estimated probabilities surpassed the accuracy of leading polling indices. The mechanism driving this precision: participants deploy genuine capital, creating powerful incentives for rigorous analysis.