How Does Polymarket Work?

The Basics

Polymarket is a prediction market exchange where you trade on the outcomes of real-world events. Every market is a simple yes-or-no question — for example, "Will BTC close above $100,000 at 3:00 PM UTC?"

You trade by buying shares. There are two types of shares in every market:

• YES shares — Pay out $1.00 if the event happens.
• NO shares — Pay out $1.00 if the event does NOT happen.

Share Pricing

Share prices range from $0.01 to $0.99 and reflect the market's collective estimate of the probability that the event will occur.

1. 1
   YES at $0.70 = 70% probability

   The market believes there's a 70% chance the event happens. If you buy at $0.70 and it does happen, you profit $0.30 (43% return).

2. 2
   NO at $0.30 = 30% probability of NO

   Since YES is at $0.70, NO is at $0.30. If the event doesn't happen, NO pays $1.00 — a $0.70 profit (233% return).

3. 3
   Prices move with demand

   As more traders buy YES, the YES price rises and the NO price falls. The two always sum to approximately $1.00.

The Order Book (CLOB)

Polymarket uses a Central Limit Order Book (CLOB) — the same matching engine used by professional stock and crypto exchanges. This is what makes it different from simpler betting platforms.

How the CLOB Works

• Makers post limit orders — They set a specific price and wait for someone to take the other side.
• Takers fill market orders — They accept the best available price and execute immediately.
• Matching engine pairs orders — When a buyer and seller agree on price, shares are created and distributed.
• Orderbook shows depth — You can see all pending orders at every price level — bids (buy) and asks (sell).

Polyblock's trading terminal gives you a real-time view of the full orderbook, streamed via WebSocket — so you see every order change as it happens.

Market Resolution

Every market has a defined resolution time and criteria. When the time arrives:

1. 1
   The event outcome is determined

   For crypto markets on Polyblock, this is based on the actual price at the resolution timestamp.

2. 2
   UMA's oracle verifies the result

   Polymarket uses UMA's optimistic oracle to verify outcomes. Anyone can dispute an incorrect resolution.

3. 3
   Winning shares pay $1.00

   If YES wins, every YES share pays $1.00. If NO wins, every NO share pays $1.00.

4. 4
   Losing shares pay $0.00

   The losing side receives nothing. Your maximum loss is always what you paid for the shares.

Where the Money Comes From

Prediction markets are zero-sum between traders. Every dollar a winner makes comes from a loser on the other side. The platform doesn't create money — it facilitates the exchange.

Share Creation

When a buyer of YES and a buyer of NO agree on prices that sum to $1.00, one YES share and one NO share are created. The $1.00 in USDC is held as collateral. At resolution, it's paid to the winning side.

Trading Existing Shares

You can also buy and sell existing shares on the orderbook before resolution. This is how most active trading happens — buying shares at one price and selling at a better price as the market moves.

Fees & Costs

• Polymarket fees — Polymarket itself charges no trading fees. Makers and takers trade fee-free on the native platform.
• Gas fees — Transactions settle on Polygon, so gas fees are minimal (fractions of a cent).
• Third-party platforms — Platforms like Polyblock that provide additional tools and convenience may charge a small fee per trade. Check the platform for current pricing.

Trading with Polyblock

While you can trade on Polymarket's native interface, Polyblock provides a professional trading experience with significant advantages: