Understanding Polymarket
Before I go into more detail about their fees, I should explain how Polymarket works. Polymarket focuses on prediction markets focusing on various topics. The idea is to consider potential outcomes and trade event contracts based on the outcome you think might occur in a specific scenario.
Trying to Predict the Outcome of an Event
For example, you might be interested in Polymarket election predictions, perhaps involving the next US Presidential election. This might focus on whether you think the Democrats or Republicans will win the next election, regardless of which politician steps up as the candidate for each party.
Each event contract provides a Yes or No answer. So, in the case of the election, the question would be, do you think the Democrats will win the Presidency? If 70% of people think yes and 30% think no, those backing Yes would pay 70 cents per share, while the No camp would pay 30 cents per share.
What Happens When a Market Resolves?
In every case, if you choose correctly, you will receive $1 per share. If you are incorrect, you lose the shares you paid for. You’ll see that all prediction markets are based on Polymarket probabilities - and these can and do change as time goes on.
In the election example, the 70% Yes and 30% No answers might fluctuate. We might see a 55% to 45% split much closer to the time, for example - or it could swing the other way entirely. If you purchased the 30% No shares, you could exit if they rose higher than that, even before the event resolves. This is a legitimate technique you can use if you wish, or you can wait until the market resolves.
Polymarket Trading Fees
When Polymarket launched in the US, it didn’t charge any fees to trade on the platform. However, they’ve recently tweaked this slightly. You likely still won’t incur a fee for participating in most prediction markets there, although there are now a few exceptions.
I’ve provided details on these exceptions in the below table. As you’ll see, a couple of Polymarket sports prediction markets are affected, although the overwhelming majority aren’t.
| Prediction Markets | Exact markets affected | Fee rate |
| Crypto Prediction Markets | All crypto including 15-minute markets | 0.25 taker fee in USDC |
| Sports Prediction Markets | Serie A (Italian football league) and men’s college basketball in the US | 0.0175 taker fee in USDC |
Dynamic Fee Structure
Note that where fees do apply, they’re dynamic. The highest fees will occur where the market is hovering around a 50/50 yes or no scenario. They’ll be smaller if they dip towards extremes. So, for example, in cases where fees do apply, they’ll be lower for a 5% yes prediction than for a 45% yes prediction.
What Is a Taker Fee?
A taker fee applies to the above markets where you accept an event contract that someone else has already created. In essence, you’re taking an event contract that’s already there.
You might also hear about maker fees. In this case, you’re the one making the event contract as it doesn’t already exist. You make the event, and then some other participants might decide to get involved as well. For clarity, you don’t currently pay any taker fees at Polymarket.
How Small Can Polymarket Trading Fees Be?
They work to four decimal points. This means you could pay as little as 0.0001 USDC where fees do apply. If your particular prediction market has a fee that works out to less than this, it will be viewed as zero, even if it is slightly above that. This means that some scenarios might technically incur a small fee, but you won’t pay anything at all in that situation.
A lot depends on the size of the trade you’re making.
Does Polymarket Charge Fees for Deposits or Withdrawals?
No - you won’t pay anything when depositing funds into your account at Polymarket. Similarly, they do not charge anything if you request a withdrawal. You can do both via the Polymarket app for convenience if you wish.
Be Aware of Fees Charged by Payment Providers
Here’s where you might be charged certain fees. For example, crypto networks may charge gas fees for processing your transactions. This can apply when sending funds from your crypto wallet to your Polymarket account and vice versa. You’ll generally pay a gas fee along with a tip in these cases.
Will You Pay Any Polymarket Trading Fees If You’re Correct in Your Prediction?
I’ve got more good news for you here - no, you won’t pay a fee for receiving $1 per share purchased for any prediction market. This holds true regardless of the value of your prediction.
For example, you may have backed the Yes market for the outcome of a sporting event, where you purchased Yes shares for $0.20 each. If you were successful, you would receive $1 per share into your Polymarket account. You wouldn’t lose any of the value of the shares to fees in this case. Of course, you may have gas fees to pay when moving funds from your Polymarket account into your crypto wallet.
Pros and Cons of the Polymarket Fee Structure
If you’re just hearing about prediction markets for the first time, you may find the Polymarket website a little difficult to understand at first - especially where applicable fees are concerned. However, I’ve come up with some main pros and cons here that explain the basics of the situation. In most cases, you won’t pay Polymarket any fees for trading in their prediction markets.
Pros
- Most markets don’t have fees
- Fees are low where they apply
- No fees for deposits or withdrawals
- Maximum fee rate is 1.56% where applicable
Cons
- Complex terminology for beginners
Low Polymarket Fees Make It a Promising Prediction Market Prospect
Polymarket offers prediction markets in a wide range of interests, from politics to sports and the economy through to the climate. It’s reassuring to know that you are unlikely to incur any trading fees unless you trade on probabilities in the crypto area or you follow men’s college basketball or Serie A. You can click on any of the links I’ve included in this article to reach the Polymarket website and look more closely at what’s on offer there.
As we’ve seen, you should be aware of any other fees your crypto provider may choose to apply to transactions. However, these are independent of Polymarket. You’ll find hundreds of event contracts at Polymarket with zero fees involved, which is ideal if you’re interested in learning more about event contracts on your favorite topics. You can always check any applicable fees before purchasing event contracts.
