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What is Polymarket? A plain-English guide to the prediction market
Polymarket turns "what do you think will happen?" into a tradeable price. A share costs between zero and one dollar, and its price is the market's probability. Here is how that actually works, and what to watch before you put money in.
Polymarket is a prediction market: a place where people buy and sell shares on the outcome of real-world events — elections, sports, economic data, crypto prices, court cases, anything with a resolvable yes-or-no answer. It runs on the Polygon blockchain and settles in USDC, a dollar-pegged stablecoin. The one idea that unlocks everything else is this: the price of a share is a probability. A share trading at $0.62 is the market saying "about a 62% chance."
How the odds actually work
Every Polymarket market has outcomes, usually two: Yes and No. Each outcome has shares that trade between $0.00 and $1.00. If your outcome happens, each share pays $1.00; if it doesn't, each share pays $0.00. So if you buy "Yes" at $0.62 and the event resolves Yes, you make $1.00 — a profit of $0.38 per share. If it resolves No, you lose the $0.62 you paid.
That single mechanic is why the price doubles as a probability. Buying Yes at $0.62 risks $0.62 to win $1.00, which is a bet the market has priced at roughly 62%. The "odds" you see on Polymarket are not a forecast from an analyst — they are the aggregate of everyone trading. When new information lands, prices move, and the market's probability updates in real time.
The 30-second version: a Polymarket share is a bet that pays $1 if you're right and $0 if you're wrong. Its price between $0 and $1 is the market's implied probability. You can buy and sell before resolution, so you are not locked in until the event settles.
What you can actually trade
Polymarket lists markets across a wide range of categories. The most active have historically been politics and elections, but the catalogue covers much more:
- Politics and elections — who wins a race, whether a bill passes, cabinet appointments.
- Sports — game winners, championship outcomes, player awards.
- Crypto and finance — token price levels, ETF approvals, macro prints like CPI or rate decisions.
- Culture and tech — product launches, awards, viral moments with a clear resolution date.
Every market has a resolution source — the specific rule for how the outcome is determined. That source matters more than people expect; a market can resolve in a way that surprises traders who didn't read the fine print.
How it works under the hood
You don't need the technical detail to use Polymarket, but it explains the risks. Each market is a set of smart contracts on Polygon. When you buy shares, you are trading ERC-1155 tokens representing your position; when the market resolves, winning shares redeem for USDC. There is no order book in the traditional sense — liquidity comes from automated market makers and, on larger markets, order-book style matching. Deposits and withdrawals move through the Polygon network, which means you need a compatible wallet and a little POL for gas.
The practical consequence: your position is self-custodied. You hold the share tokens in your own wallet. That is the appeal of a crypto-native platform, and also the reason the smart-contract and wallet-security risks are real.
The risks worth taking seriously
Prediction markets are speculative instruments, and Polymarket carries risks beyond "you might be wrong." Here are the ones that actually bite people:
Regulatory risk. Polymarket has operated in a legal grey zone and has faced enforcement action in the United States. It restricts US persons and has moved toward a compliant structure, but the rules differ by country and can change quickly. Confirm what is legal where you live before you deposit.
Resolution risk. A market resolves according to its stated rules and source. Ambiguous events — "Will X happen by date Y?" when X is vaguely defined — can resolve against you even when your intuition was directionally right. Read the resolution criteria, not just the headline.
Liquidity and slippage. Thin markets can be hard to exit before resolution. The price you see is the price for the size shown; a large buy or sell moves it. On small markets, you can be stuck holding a position you cannot exit at a fair price.
Smart-contract and wallet risk. A self-custodied position is only as safe as the contracts and your key hygiene. Bugs, exploits, and phishing are real in crypto generally, and Polymarket is not exempt.
Polymarket vs Kalshi — the quick read
Kalshi is the other name people search alongside Polymarket, and the comparison is natural: both sell prediction-market contracts on real-world events. The differences are structural. Kalshi is a regulated US exchange overseen by the CFTC and settles in dollars through a brokerage account. Polymarket is crypto-native, on-chain, settled in USDC, and accessible globally to anyone who can use Polygon. The mechanics of reading an implied probability are nearly identical; the legal footing and the rails underneath are not. We cover Kalshi in its own guide: What is Kalshi?
A note on where NexFlow fits
These guides are educational — for the venues themselves, Polymarket and Kalshi publish their own terms, rules, and fees, and those documents are what to read before you trade. If you trade crypto spot or perps, NexFlow gives you live prices, depth, and safety checks before you swap, and the guides in this section are here to help you read any market more safely.
Frequently asked
What is Polymarket?
Polymarket is a prediction market on the Polygon blockchain where users buy and sell shares on the outcome of real-world events. A share pays out $1 if the event resolves the way you bought it, and $0 if it does not. Because shares trade between $0 and $1, the live price of a share is the market's implied probability of that outcome.
Is Polymarket legal?
Polymarket has operated in a regulatory grey zone for most of its life and has faced enforcement action in the United States. It restricts US users and has pursued a path toward compliance, but the legal status of prediction markets varies by jurisdiction and can change. Check the rules that apply where you live before you trade.
How do Polymarket odds work?
Each outcome has shares trading between $0 and $1. A share priced at $0.62 implies the market thinks there is roughly a 62% chance of that outcome. Buying 'Yes' at $0.62 risks $0.62 to make $1.00, so the price is a probability, a payout, and a price all at once.
What is the difference between Polymarket and Kalshi?
Both are prediction markets, but they are built differently. Polymarket is a crypto-native platform on Polygon settled in USDC, while Kalshi is a regulated US exchange operating under CFTC oversight. The mechanics of reading odds are similar; the legal footing and settlement rails are not.
Can you lose money on Polymarket?
Yes. If the outcome you bought resolves against you, the share pays $0 and you lose the full price you paid. Prices can also move against you before resolution, so you can sell at a loss. Prediction markets are speculative instruments, not savings accounts.