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 wagering against a bookmaker's built-in edge, you exchange positions with other participants who hold opposing views. Market prices continuously evolve to reflect the aggregate probability assessment of the community — shifting instantly as fresh information emerges.
The basics: prediction markets
In a prediction market, you acquire shares representing possible outcomes. Each share yields $1 upon YES resolution, or $0 if the event resolves NO. Purchasing a YES share for 40 cents ($0.40) signals your belief that the event has a 40% likelihood of occurring. Victory means your capital doubles; defeat means forfeiting your investment.
Polymarket differs from conventional bookmakers by eliminating the house edge (the "vig"). Prices emerge purely from the interplay of buyer and seller demand.
How Polymarket uses blockchain
Polymarket operates atop the Polygon blockchain (a layer-2 solution layered over Ethereum). This architecture delivers:
- Complete on-chain transparency and auditability of every transaction
- Automated execution of deposits, trades, and settlements via smart contracts
- Immunity from Polymarket operators freezing or altering outcomes
- Final settlement occurring within minutes rather than weeks
USDC: the currency of Polymarket
Trading activity on Polymarket exclusively utilises USDC (USD Coin), a stablecoin maintaining a fixed 1:1 exchange rate with the US dollar. Your account remains insulated from cryptocurrency price swings — one USDC perpetually equals one dollar.
How markets resolve
Once an event's outcome becomes established, Polymarket employs the UMA Oracle (Universal Market Access) to finalise market settlements. An appointed "proposer" declares the result; a 2-hour challenge period follows; absent objections, settlement becomes binding. Contested outcomes proceed to a vote among UMA token holders — a decentralised resolution mechanism.
Getting started on Polymarket
- Create an account — register via email and fulfil identity verification requirements
- Deposit USDC — fund your account through MoonPay, bank transfer, or existing cryptocurrency holdings
- Browse markets — explore categories spanning elections, athletics, 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 before the market concludes
PolyGram streamlines this workflow through a mobile-optimised platform and passwordless authentication. Start trading on PolyGram →
Why Polymarket prices are accurate
Empirical evidence demonstrates that prediction markets consistently surpass traditional polling methodologies and specialist judgement 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 edge: financial incentives compel participants to form and express genuine beliefs.