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 decentralised prediction exchange: rather than wagering against a traditional sportsbook's built-in edge, you trade directly with other participants who hold opposing views. Market prices continuously evolve to reflect participants' aggregate probability assessments — shifting instantly as fresh information emerges.
The basics: prediction markets
Prediction markets operate by allowing you to purchase shares representing possible outcomes. Each share is worth $1 upon YES resolution, or $0 upon NO resolution. Should you acquire a YES share for $0.40, you're implicitly assigning a 40% likelihood to that occurrence. Victory means your capital doubles; defeat means forfeiting your investment.
Polymarket diverges from conventional bookmakers by eliminating the built-in profit margin (the "vig"). Instead, market participants themselves establish pricing through their collective buying and selling activity.
How Polymarket uses blockchain
Polymarket operates atop the Polygon blockchain (an Ethereum layer-2 solution). This architecture delivers several advantages:
- Complete transparency — every transaction remains auditable and immutable on-chain
- Automated execution — smart contracts govern deposits, order matching, and fund distribution
- Custody independence — the Polymarket operator cannot seize assets or alter settlement outcomes
- Rapid finalisation — payouts conclude within minutes rather than business days
USDC: the currency of Polymarket
Polymarket exclusively facilitates trading in USDC (USD Coin), a stablecoin maintaining a constant 1:1 exchange rate with the US dollar. Your account balance remains insulated from cryptocurrency price swings — one USDC perpetually equals one dollar.
How markets resolve
Upon an event's conclusion, Polymarket leverages the UMA Oracle (Universal Market Access) to determine final payouts. An appointed "proposer" reports the outcome; a 2-hour challenge period follows; absent objections, settlement becomes binding. Should disputes arise, UMA token holders participate in a decentralised vote to arbitrate the result.
Getting started on Polymarket
- Create an account — register via email and complete identity verification requirements
- Deposit USDC — fund your account through MoonPay, bank transfer, or existing cryptocurrency holdings
- Browse markets — explore elections, athletics, digital assets, entertainment and countless others
- Buy shares — select YES or NO and specify your investment amount
- Manage positions — liquidate holdings whenever you choose before the event concludes
PolyGram streamlines this workflow through an intuitive mobile design and passwordless authentication. Start trading on PolyGram →
Why Polymarket prices are accurate
Empirical evidence demonstrates that prediction markets consistently surpass conventional polling methodologies and specialist commentary in forecasting accuracy. Throughout the 2024 US election cycle, Polymarket's probability assessments outperformed the majority of established polling organisations. The mechanism behind this success: financial incentives compel participants to make rigorous, unbiased judgements.