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 exchange: rather than wagering against a fixed bookmaker spread, you transact directly with other market participants who hold opposing views. The market price continuously reflects participants' aggregate probability assessment — shifting instantly as fresh information emerges.
The basics: prediction markets
In a prediction market, you acquire shares representing possible outcomes. Each share is redeemable for $1 upon a YES resolution, or worthless upon a NO resolution. Purchasing a YES share at 40 cents ($0.40) signals your belief that the event has a 40% likelihood of occurring. Success doubles your capital; failure forfeits your investment.
Polymarket operates without the house edge typical of conventional sportsbooks. Market prices emerge solely from the interplay of buyer and seller demand.
How Polymarket uses blockchain
Polymarket operates atop the Polygon blockchain (an Ethereum layer-2 scaling solution). This architecture delivers:
- Complete on-chain transparency and auditability of all activity
- Autonomous execution of funding, trading, and settlement via smart contracts
- Elimination of custodial risk — Polymarket operators cannot seize or alter funds
- Near-instantaneous settlement rather than multi-day clearing cycles
USDC: the currency of Polymarket
Polymarket exclusively uses USDC (USD Coin), a stablecoin maintaining a strict 1:1 peg to the US dollar. Your account balance remains insulated from cryptocurrency price swings — each USDC unit consistently equals $1.
How markets resolve
Upon event conclusion, Polymarket leverages the UMA Oracle (Universal Market Access) for market settlement. An outcome "proposer" submits the result; a 2-hour challenge period follows; absent disputes, settlement becomes binding. Contested resolutions escalate to UMA token holders for decentralised adjudication.
Getting started on Polymarket
- Create an account — register via email and fulfil identity verification requirements
- Deposit USDC — fund via MoonPay, direct bank deposit, or external crypto holdings
- Browse markets — explore elections, athletics, digital assets, entertainment and beyond
- Buy shares — select YES or NO and specify your position size
- Track and exit — liquidate holdings whenever before the event concludes
PolyGram streamlines this workflow through a mobile-optimised platform and passwordless email authentication. Start trading on PolyGram →
Why Polymarket prices are accurate
Prediction markets consistently surpass traditional polling methodologies and specialist opinion in forecast precision. Throughout 2024's electoral contests, Polymarket's probability assessments demonstrated superior accuracy relative to leading polling indices. The mechanism: financial incentives compel participants toward rigorous, unbiased judgment.