How Polymarket Works
Understand how Polymarket operates — from its blockchain-based order book to USDC settlement and market resolution.
The Order Book
Unlike traditional automated market makers (AMMs), Polymarket uses a hybrid CLOB system. This means buyers and sellers place orders at specific prices, and trades execute when orders match. This creates tighter spreads and better prices for traders.
The order book is operated by Polymarket but settles on the Polygon blockchain using Gnosis Conditional Token Framework (CTF). This means your positions are real blockchain tokens that you control.
USDC and Settlement
All trading on Polymarket uses USDC.e (bridged USDC on Polygon). When you buy a YES contract at $0.60, you pay $0.60 USDC. If the market resolves YES, your contract is worth $1.00 USDC — a $0.40 profit.
The conditional tokens representing your positions are ERC-1155 tokens on Polygon. You can hold them in any compatible wallet, and they can be redeemed when markets resolve.
Market Creation and Resolution
Polymarket creates markets around newsworthy events. Each market has clear resolution criteria — specific conditions that determine whether the outcome is YES or NO. Markets can resolve before their end date if the outcome becomes certain.
Resolution is handled through UMA's optimistic oracle, a decentralized system where reporters propose outcomes and a dispute period allows challenges. This ensures fair and transparent resolution.
Trading on Polymarket via PolyFire
While Polymarket has its own web interface, PolyFire provides a streamlined trading experience through Telegram. You get a non-custodial wallet, instant execution, and access to smart money intelligence — all without leaving the Telegram app.
PolyFire also adds layers of intelligence that Polymarket's native interface doesn't offer: alpha scores, smart wallet tracking, copy trading, and AI-powered signals.