Disclaimer All content and information on this website (the "Site") is for informational and educational purposes only, does not constitute financial, investment, legal, or tax advice, and is not an offer, solicitation, or recommendation to buy or sell any security, futures contract, or financial instrument. No Investment Advice The author of this Site is not a financial advisor. The information presented is not intended to be and does not constitute personalized investment advice. Any discussion of securities or markets is for illustrative purposes only. You are solely responsible for your own investment decisions. You should not make any financial, investment, legal, or tax decision based on any of the information provided on this Site without first consulting a qualified and licensed professional and conducting your own research and due diligence. Risk of Loss All trading and investing involve a substantial risk of loss. The assets and strategies discussed on this Site may not be suitable for all investors. You may lose all or more than your initial investment. Past performance is not indicative of future results. No Warranties The information on this Site is provided on an "as is" basis. We make no warranties or representations, express or implied, as to the accuracy, completeness, or timeliness of the information. We are not liable for any errors, omissions, or any losses, injuries, or damages arising from your use of this information. Any forward-looking statements or market predictions are speculative by nature and are not guarantees. Disclosure The author may hold, buy, or sell positions in any assets, securities, or financial instruments discussed on this Site at any time and without notice. Personal Opinions All views and opinions expressed herein are the author's own and do not represent the opinions of any entity whatsoever with which the author has been, is now, or will be affiliated.

Holding rewards

https://docs.polymarket.com/polymarket-learn/trading/holding-rewards

Polymarket is launching a Holding Rewards program, starting at a 4.00% annualized rate, to promote long-term pricing accuracy in certain markets.

This reward is funded by the Polymarket Treasury and calculated based on a user's Total Position Value, which is the combined market value of both their "Yes" and "No" shares using their respective mid-prices. This value is determined through random hourly samples, and the rewards are distributed daily.

Polymarket explicitly states this rate is variable, subject to change, and can be capped at their discretion. This program is a temporary iteration, as a new reward and oracle-resolution system is planned for later this year, which will require users to perform a 1-click migration.

This structure incentivizes users to act as liquidity providers (LPs) or to simply keep their capital on the platform rather than withdrawing it after making a trade.

Accuracy

https://polymarket.com/accuracy

APIs and developers page

https://docs.polymarket.com/quickstart/introduction/main

Check later when building the dashboard

Market Creation

https://docs.polymarket.com/polymarket-learn/markets/how-are-markets-created

On Polymarket, market creation is a curated process managed internally by the markets team, not a feature directly available to users. While users cannot create markets themselves, they are strongly encouraged to submit proposals for new market ideas. To increase the likelihood of a proposal being listed, suggestions should be detailed, specifying a clear market title, a reliable resolution source for determining the outcome, and any evidence of trading demand for that particular topic.

Price Calculation

https://docs.polymarket.com/polymarket-learn/trading/how-are-prices-calculated

On Polymarket, prices are synonymous with probabilities and are determined by the real-time order book. The displayed price is typically the midpoint of the highest "Yes" bid and the lowest "Yes" ask. However, if this bid-ask spread is wider than $0.10, the platform shows the last traded price instead to provide a more accurate signal. Markets are created with no initial shares or odds; the first price is set when "market makers" place "Yes" and "No" limit orders that "match" by summing to $1.00 (e.g., a $0.60 "Yes" bid matching a $0.40 "No" bid), at which point the first shares are created and the market becomes active.

Market Resolution

https://docs.polymarket.com/polymarket-learn/markets/how-are-markets-resolved

Polymarket's markets are resolved by the UMA Optimistic Oracle, a system that finalizes an event's outcome. The process begins when an individual proposes a result, a high-stakes action that requires them to stake a $750 bond in USDC.e.

Once proposed, this outcome is considered "optimistically" correct and enters a 2-hour challenge period. If anyone disagrees, they can dispute the proposal (which also requires staking a bond). If undisputed, the proposal is validated, the market resolves, the proposer gets their bond back plus a reward, and holders of winning shares receive $1 per share. If disputed, the resolution is escalated to UMA's full dispute process. The text issues a strong warning that proposing an outcome incorrectly or too early will result in the forfeiture of the entire $750 bond

The entire system is a two-step "optimistic" process designed to be fast and cheap in most cases, with a slow, expensive, and high-stakes "court" (the DVM) as a backstop for disputes.

1. The "Happy Path": Undisputed Resolution

This is the standard process for over 99% of markets. It is a simple, automated 2-hour-and-done event.

Step 1: The Proposal: After a market's event has concluded, any user (a "proposer") can be the first to propose the final outcome (e.g., "Yes").
Step 2: The Bond: To make this proposal, the user must stake a $750 bond in $USDC.e. This is a high-stakes claim that they are correct.
Step 3: The 2-Hour Challenge Period: As soon as the proposal is made, a 2-hour "challenge period" (also called a "liveness period") begins. The market is now "In Review."
Step 4: Finalization: If no one disputes the proposal within those two hours, the system "optimistically" assumes the proposal is correct. The market is finalized, and:

Holders of the winning shares (e.g., "Yes" shares) can redeem them for $1.00 each.
Holders of the losing shares ("No" shares) see their value go to $0.
The proposer receives their original $750 bond back, plus a small $5 reward for their service.

2. The "Unhappy Path": A Disputed Resolution

If anyone believes the initial proposal is incorrect, they can challenge it. This triggers a formal dispute and escalates the market to UMA's decentralized "truth court."

Step 1: The Dispute: Within the 2-hour window, another user (a "disputer") can formally dispute the proposal.
Step 2: The Disputer's Bond: To file the dispute, the disputer must also stake an equal bond (another $750). There is now $1,500 locked in the resolution contract.
Step 3: Escalation to the DVM: The dispute is immediately escalated to UMA's Data Verification Mechanism (DVM). The market is no longer in Polymarket's hands; it is now in the hands of UMA token holders.
Step 4: The 48-Hour Vote: A 48-hour vote begins. This is a "commit-reveal" process where thousands of UMA token holders worldwide vote on the correct outcome. Their voting power is proportional to the amount of UMA tokens they have staked.
Step 5: The Final Judgment: Once the vote concludes, the DVM renders its binding judgment. There are four possible outcomes:

The Proposer Wins: The DVM vote agrees with the initial proposal.

Proposer (Winner): Gets their $750 bond back plus half of the disputer's bond ($375) as a bounty. Total = $1,125.
Disputer (Loser): Loses their entire $750 bond.

The Disputer Wins: The DVM vote agrees with the disputer and overturns the proposal.

Disputer (Winner): Gets their $750 bond back plus half of the proposer's bond ($375) as a bounty. Total = $1,125.
Proposer (Loser): Loses their entire $750 bond.

The Outcome is "Too Early": The DVM rules that the event has not concluded yet, meaning the proposal was premature. This is what the text warns against.

Proposer (Loser): Loses their entire $750 bond.
Disputer (Winner): Is treated as correct, receiving their $750 bond back plus the $375 bounty.

The Outcome is "Unknown / 50-50": In rare cases of extreme ambiguity where the market rules cannot be applied, the DVM can vote to resolve the market at 50/50.

The market resolves at $0.50, and both "Yes" and "No" shares can be redeemed for 50 cents.
The Proposer (Loser): Is still considered incorrect for proposing a determinate outcome and loses their $750 bond.
Disputer (Winner): Is considered correct for challenging the proposal and receives the $375 bounty.

3. The "Dark Side": Known Risks & Governance Attacks

The DVM is not a perfect system; it's a plutocracy, not a democracy. The "truth" is determined by the side with the most staked UMA tokens, not the most people. This has led to at least one known "governance attack" on Polymarket.

Whale Manipulation: In a high-profile 2024 market with over $7 million in volume, a few UMA "whales" (accounts with massive token holdings) allegedly colluded.
The Attack: They reportedly voted against the real-world outcome and against a clarification issued by the Polymarket team itself.
The Result: Because their collective stake was large enough, they successfully forced the market to resolve incorrectly, profiting from their positions. Polymarket acknowledged the "unprecedented situation" but declared the oracle's (flawed) decision was final and that funds would not be refunded.

1. What happens to UMA holders if they vote incorrectly?

When a dispute is escalated to the DVM, UMA token holders vote on the outcome.

If you vote with the majority (the "truth"): You receive rewards.
If you vote with the minority (incorrectly): You are penalized. This penalty is called slashing. A small percentage (e.g., ~0.1%) of your staked UMA tokens is taken from you.
If you don't vote (are idle): You are also considered part of the "incorrect" side and are slashed.

The slashed tokens from the minority and idle voters are then redistributed to the voters in the majority. This is a direct, immediate financial punishment for voting against the consensus truth or for failing to participate.

2. What are their incentives to vote the truth?

There are two main incentives, one short-term (carrots & sticks) and one long-term (game theory).

Direct Financial Reward (Short-Term):

"The Stick": The fear of being slashed if you vote in the minority.
"The Carrot": The promise of receiving rewards (from protocol inflation and the slashed tokens of minority/idle voters) if you vote in the majority.

This creates a powerful "Schelling point"—a situation where you are incentivized to vote for the outcome you expect everyone else to vote for. In a market with a clear, objective, real-world outcome, the most obvious and safest bet is to simply vote for the truth.
Preserving the Oracle's Value (Long-Term): This is the most important incentive. The UMA token's entire value is derived from its reputation as a reliable and incorruptible oracle.

If the DVM (the "court") starts resolving markets incorrectly, trust in the entire system collapses.
If trust collapses, platforms like Polymarket will stop using UMA as their oracle.
If no one uses UMA, the token has no utility, and its price will crash to zero.

Therefore, every UMA token holder—especially "whales" with large investments—has a massive, shared financial incentive to protect the oracle's integrity. Voting for the truth preserves and grows the value of their own UMA holdings.

3. How often does a bet go to that court?

Extremely rarely. The "court" (the DVM) is the expensive, slow, and high-stakes "backstop," not the normal process.

More than 98-99% of markets are resolved on the "happy path" (the 2-hour undisputed window). This is because the $750 bond on both sides ($1,500 total at stake) is a highly effective filter.

A dispute only happens if:

A proposer makes a blatant, obvious mistake (e.g., resolves a sports market "Yes" when the team clearly lost), and a disputer sees an easy opportunity to claim the $375 bounty.
The market rules are genuinely ambiguous, and both sides are willing to bet $750 that their interpretation is the one the DVM will agree with.

4. What amount is needed to overturn the truth?

This is the system's "Cost of Corruption" (CoC). To guarantee an incorrect outcome, an attacker must control 51% of the total value of UMA tokens staked in the DVM.

This is a 51% attack. The attacker's cost is the amount of money required to buy a majority of all staked UMA tokens.

The core security assumption of UMA is that this Cost of Corruption (CoC) must always be higher than the Profit from Corruption (PfC).

Example: An attacker wants to steal $7 million from a Polymarket bet (the PfC).
To do this, they must buy, for example, $100 million worth of staked UMA tokens (the CoC) to control the vote.
The moment they use those $100M in tokens to vote incorrectly, they destroy the oracle's reputation. The UMA token price crashes, and their $100M investment becomes worthless.
Result: The attacker would lose $100M to steal $7M. This is a-financially irrational act, which is what (in theory) secures the network.

However, this brings us to the most important question.

5. Instances UMA Has Not Properly Decided the Truth

Yes, this has happened. The theory of "economic rationality" failed in at least one high-profile, catastrophic event.

The "Ukraine/Trump Mineral Deal" Attack (March 2024)

The Market: A market with over $7 million in volume asked, "Ukraine agrees to Trump mineral deal before April?"
The Truth: The real-world answer was unequivocally "No." No such deal was made.
The Attack: A small group of UMA "whales" (accounts with massive token holdings) allegedly controlled a significant portion of the voting power (one whale was estimated to have 25% of the vote across three wallets). They had pre-existing bets on "Yes."
The Vote: These whales colluded to vote "Yes," against objective reality. Because the DVM is a plutocracy (rule by wealth, not by numbers), their financial stake was large enough to force the "Yes" outcome to win.
The Result: The market was officially resolved to "Yes" by the UMA oracle. The attackers successfully stole millions from other users.
The Aftermath: Polymarket announced this was an "unprecedented situation" and a governance attack. However, because the UMA oracle's decision is final and binding, they stated they could not reverse the outcome or issue refunds.

This incident was a critical failure of the UMA model. It exposed that if the Profit from Corruption (PfC) on a single, large market is high enough—and the attackers believe they can get away with it without completely destroying the token's value—the system can be successfully exploited.

Market Disputes

https://docs.polymarket.com/polymarket-learn/markets/dispute

Trading Fees

There are no fees to deposit or withdraw USDC, although intermediaries such as Coinbase, MoonPay, etc may charge transaction fees.

There are no fees to trade shares in any market. This means that Polymarket does not stand to benefit from the outcome of any market or usage of any trader.

Polymarket Terms of Use

https://polymarket.com/tos

1. Trading Restrictions (Restricted Persons)

This is the most critical rule: You are strictly prohibited from using the trading features (the "Platform" or "Technology Features") if you are a "Restricted Person."

This includes anyone residing in, located in, or a citizen of:

The United States (US)
United Kingdom (UK)
France
Ontario (Canada)
Singapore
Poland
Thailand
Australia
Belgium
Taiwan
Any jurisdiction under comprehensive sanctions (like Iran, Cuba, North Korea, Syria, and specified regions of Ukraine).

Using a VPN or any other tool to hide your location and bypass these restrictions is strictly forbidden.
If you are found in violation, your wallet may be placed in "close-only mode."
If you are in a Restricted Jurisdiction, you may only use the informational "Content Features" (like reading news).

2. The Company's Role and Disclaimers

Not an Exchange: The Company states it does not operate a crypto exchange, control your transactions, or offer trade execution.
Non-Custodial: The Company never has access to or custody of your self-hosted wallet, private keys, or crypto-assets. You are 100% responsible for your wallet's security.
No Control: The Company (and the software developer, "Blockratize") do not own or control the underlying Polygon blockchain or the smart contract protocol. Transactions are irreversible, and you are responsible for all network fees.
No Advice: All information on the site is for "informational purposes only." It is not financial, investment, legal, or professional advice.

3. Your Responsibilities and Risks

High Risk: You acknowledge that trading event-based contracts is highly risky, volatile, and experimental. You can lose the entire amount of crypto you supply.
Your Promises (Representations): By using the site, you promise that you are:

At least 18 years old.
Not a Restricted Person (see point 1).
Not under economic sanctions.
Sophisticated enough to understand blockchain technology and its risks.
Not using a VPN to circumvent the rules.

Contract Resolution: You understand that the Company is not involved in resolving the outcome of contracts. This is handled by a third-party optimistic oracle, the UMA Optimistic Oracle.

4. Prohibited Conduct

You agree not to:

Violate any laws.
Use a VPN to access restricted features.
Provide false or misleading information.
Engage in manipulative trading (like wash trading, spoofing, or front-running).
Use bots or scrapers to copy data.
Attempt to hack, virus, or reverse-engineer the site.

5. Liability and Disputes

"AS IS" Service: The platform is provided "AS IS" with no warranties of any kind (including for accuracy, uptime, or security).
Limitation of Liability: The Company's total liability to you for any claim is limited to $100. They are not responsible for any losses from hacks, downtime, or market volatility.
Indemnification: You must defend and pay for any legal claims (including attorney's fees) brought against the Company that arise from your violation of the terms or your use of the site.
Governing Law: The agreement is governed by the laws of Panama.
Mandatory Arbitration: You waive your right to a jury trial. Any dispute that can't be solved by good-faith negotiation (within 90 days) must be settled by a single arbitrator in Panama.
Class Action Waiver: You cannot participate in any class action, class arbitration, or representative lawsuit against the Company. All disputes must be handled individually.

6. Modifications

The Company reserves the right to modify these Terms or change, suspend, or disable any part of the site or its features at any time, without notice.

Disclaimer All content and information on this website (the "Site") is for informational and educational purposes only, does not constitute financial, investment, legal, or tax advice, and is not an offer, solicitation, or recommendation to buy or sell any security, futures contract, or financial instrument. No Investment Advice The author of this Site is not a financial advisor. The information presented is not intended to be and does not constitute personalized investment advice. Any discussion of securities or markets is for illustrative purposes only. You are solely responsible for your own investment decisions. You should not make any financial, investment, legal, or tax decision based on any of the information provided on this Site without first consulting a qualified and licensed professional and conducting your own research and due diligence. Risk of Loss All trading and investing involve a substantial risk of loss. The assets and strategies discussed on this Site may not be suitable for all investors. You may lose all or more than your initial investment. Past performance is not indicative of future results. No Warranties The information on this Site is provided on an "as is" basis. We make no warranties or representations, express or implied, as to the accuracy, completeness, or timeliness of the information. We are not liable for any errors, omissions, or any losses, injuries, or damages arising from your use of this information. Any forward-looking statements or market predictions are speculative by nature and are not guarantees. Disclosure The author may hold, buy, or sell positions in any assets, securities, or financial instruments discussed on this Site at any time and without notice. Personal Opinions All views and opinions expressed herein are the author's own and do not represent the opinions of any entity whatsoever with which the author has been, is now, or will be affiliated.

27Research

Understanding how Polymarket works