How Does Polymarket Work? Fees, Resolution and US Status
Polymarket is a prediction market where people buy and sell shares in the outcome of real-world events, such as elections, sports and economic data. Each share pays $1 if its outcome happens and $0 if it does not, so prices act as odds. The main Polymarket exchange is on-chain and was blocked for US users after a 2022 CFTC settlement. As of October 2026, Polymarket also runs a separate US product, and its legal status is still being tested.
Key takeaways
- Polymarket lists yes/no markets. Winning shares pay $1 each and losing shares become worthless.
- Prices move with trading, so a 40 cent “Yes” share implies roughly a 40% chance.
- Outcomes are settled with UMA’s Optimistic Oracle, which allows anyone to propose a result or dispute one.
- Polymarket added taker fees in 2026. Most markets were fee-free before that, and geopolitics markets still were as of March 2026.
- As of October 2026, the main exchange is not open to US users. A separate CFTC-licensed US product exists, and New York sued over it on September 24, 2026.
- You can lose your whole stake. This is not legal advice, so check your local law.
What is Polymarket?
Polymarket was founded in New York City in June 2020 by Shayne Coplan. Participants deposit cryptocurrency through the Polygon blockchain network (Wikipedia). If you are new to the idea, start with our guide on what a prediction market is. Polymarket is one example of the wider trend in our DeFi sports betting overview.
How does Polymarket work?
Each market asks a question with a clear outcome. Traders buy “Yes” or “No” shares priced between $0.01 and $1. A Yes share at $0.72 implies a 72% chance, though it is only a market price (Wikipedia). Polymarket used an automated market maker early on, then moved to an order book where buyers and sellers match each other (same source). You can sell your shares before the event ends, at whatever price others will pay.
How does a Polymarket market go from start to payout?
- A market is listed. It has a question and written resolution rules. Read the rules first, because they decide the payout.
- Traders buy and sell shares. Orders match in the order book, and prices move as opinions change.
- The event happens.
- Someone proposes the result. Polymarket’s help center says a proposer must put up a bond, cited at $750 in USDC.e, which is forfeited if the proposal is unsuccessful.
- A 2 hour challenge period starts. Anyone who disagrees can dispute the outcome during this window.
- Disputes go to UMA. If a proposal is not approved, it moves into UMA’s dispute resolution process.
- Payout. Holders of winning shares receive $1 per share, and losing shares become worthless (Polymarket Help Center).
The help center says markets are resolved by “the UMA Optimistic Oracle, a smart-contract based optimistic oracle.” Resolution is not instant, and disputes can delay payouts.
What are Polymarket fees?
Polymarket’s fees have changed in 2026, so check its current fee page before trading. Here is the dated record we could confirm:
- January 5, 2026. A small taker-only fee began on 15-minute crypto markets. Polymarket said most other markets stayed fee-free. The fees fund a Maker Rebates Program that pays market makers daily (The Block, January 6, 2026).
- February 18, 2026. Fees launched on sports markets.
- March 30, 2026. Fees rolled out across nearly all remaining categories. Geopolitics and world events markets stayed fee-free. Takers pay a fee that varies with the market’s probability, and makers pay nothing (Pine Analytics, March 25, 2026).
We could not open Polymarket’s own fee page, so exact rates are not listed here.
Is Polymarket legal in the US?
The answer depends on which Polymarket you mean. This history is current as of October 9, 2026, and it is not legal advice.
- January 3, 2022. The CFTC found Polymarket was offering event-based binary options without registering, and ordered a $1.4 million penalty (CFTC). Polymarket then blocked US customers.
- July 2025. The CFTC and the Department of Justice ended their investigations without new charges. Polymarket announced it would buy QCEX, a CFTC-licensed exchange and clearinghouse, for $112 million (Wikipedia).
- November 2025. The CFTC issued an amended order of designation allowing an intermediated trading platform in the US. Polymarket began rolling out its US app to waitlisted users in early December 2025, with sports markets first (Yahoo Finance, December 4, 2025).
- April 28, 2026. Bloomberg reported, via CoinDesk, that Polymarket was asking the CFTC to let US users onto its main exchange. At that time, US users remained blocked from it and the US platform “has yet to fully launch.” A CFTC vote would be needed (CoinDesk).
- September 24, 2026. New York’s attorney general sued Polymarket, alleging an unlicensed gambling business. Polymarket says the CFTC has exclusive authority (Al Jazeera). Wikipedia also records a Nevada complaint in January 2026.
What is available right now: We found no report that the CFTC has approved US access to the main offshore exchange. The US-facing product is separate, sports came first, and state rules vary. Check Polymarket’s own site for current availability in your state. Do not try to bypass location rules. Doing so can break the platform’s terms and local law. For the wider legal picture, see the regulation section of that guide.
How does Polymarket compare to Kalshi?
| Feature | Polymarket | Kalshi |
|---|---|---|
| Regulator | CFTC settlement in 2022. CFTC order for a separate US platform in November 2025 | CFTC designated contract market since November 2020 |
| Currency | Crypto deposits via Polygon. Payout is $1 per winning share | Payout is $1 per winning contract |
| Custody | Not confirmed in sources we opened | Not confirmed in sources we opened |
| Market types | Politics, sports, crypto and more. US launch started with sports | Sports are over 90% of activity per Wikipedia (2025 data) |
| US access (Oct 2026) | Main exchange blocked for US users. Separate US product, with a New York lawsuit filed September 24, 2026 | Operates in the US since July 2021, with court fights in several states |
Sources for the table: Wikipedia: Kalshi and the sources above.
Risks
- Loss of stake. Shares on the wrong outcome pay $0.
- Smart contract risk. On-chain markets rely on code that can fail.
- Oracle and dispute risk. Results come from a proposal and dispute process, so payouts can be delayed or contested.
- Custody and wallet risk. Lost keys or scams can cost you funds.
- Liquidity. Thin markets can have wide gaps between buy and sell prices.
- Regulatory risk. Access and rules can change quickly, as the 2026 lawsuits show.
- Fewer protections and addiction risk. Do not assume sportsbook-style safeguards.
FAQ
What is Polymarket?
It is a prediction market founded in New York City in 2020 where users trade shares on event outcomes, using crypto deposits through the Polygon network.
Is Polymarket legal in the US?
Not simply yes or no. The main exchange has been blocked for US users since a 2022 CFTC settlement. A separate CFTC-licensed US product exists, and states such as New York are challenging it. Check your state’s law.
What are Polymarket fees?
Taker fees were added in 2026, starting January 5, with most categories covered from March 30. Geopolitics was fee-free as of March 2026, and makers pay no fee. Check Polymarket’s current fee page.
How does Polymarket resolve markets?
Through UMA’s Optimistic Oracle. Someone proposes a result with a bond, there is a 2 hour challenge period, and disputes go to UMA’s dispute process. Winning shares then pay $1 each.
How do I use Polymarket?
Use only the product that Polymarket offers in your location, follow its identity and location checks, and read each market’s rules before trading. Only risk money you can afford to lose.
Gambling involves risk. If it stops being fun, help is available. In the US, call or text the National Problem Gambling Helpline at 1-800-MY-RESET (1-800-697-3738), run by the National Council on Problem Gambling. See our responsible gambling page. Many products are for ages 21 and over.
Sources
- Wikipedia: Polymarket
- Wikipedia: Prediction market
- Wikipedia: Kalshi
- Polymarket Help Center: how markets are resolved
- The Block: Polymarket taker fees, January 6, 2026
- Pine Analytics: Polymarket fee rollout, March 25, 2026
- CFTC order against Polymarket, January 3, 2022
- Yahoo Finance: Polymarket US relaunch, December 4, 2025
- CoinDesk: Polymarket seeks CFTC approval, April 28, 2026
- Al Jazeera: New York sues Polymarket, September 24, 2026
- National Council on Problem Gambling
