3 hours ago
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Polymarket is rolling out the largest update to its business to date, moving from a retail prediction market to a more institutional trading platform.
The company is redesigning its trading engine, adding a new order book, and issuing its own collateral token, Polymarket USD. All these changes aim to speed up execution, reduce costs, and better suit the platform for professional traders, bots, and brokers, especially as U.S. compliance expectations become stricter.
The firm described the upgrade as its “biggest change to date” and said it’s all about new smart contracts, a new trading system, and a stablecoin for collateral. The move comes only a few days after Intercontinental Exchange invested $600 million in the prediction markets platform. The funding was part of the exchange operator’s previously announced plan to invest up to $2 billion in Polymarket, the company said.
Rebuilt trading engine improves execution for pro traders
At the center of the upgrade is a completely rebuilt order book and matching engine. This system determines how buy and sell orders interact, and improving it can significantly affect execution speed and price accuracy. Polymarket says the new design will allow trades to settle faster while lowering gas costs for users.
The new system will also support EIP-1271, an Ethereum standard that allows smart contract-based wallets, such as multisigs and automated trading systems, to sign transactions, expanding compatibility beyond traditional wallets.
These features are commonly required by professional trading desks that rely on bots, APIs, and multi-signature wallets. However, the transition will require some adjustments. Polymarket plans to cancel all open orders during the migration, though traders will be given several days’ notice. This step is necessary to ensure that orders created under the old system do not conflict with the new matching engine.
Power users may feel the impact more than casual traders. Those running automated trading bots will need to update their software development kits to work with the new order structure. Builders using APIs will also need to adapt their integrations before trading resumes under the upgraded infrastructure.
Polymarket replaces bridged stablecoin with new collateral token
Alongside the trading overhaul, Polymarket is introducing a new stablecoin called Polymarket USD. This token will be used as collateral across the platform instead of the previously used bridged USDC.e on Polygon.
The shift positions Polymarket closer to the settlement standards that major financial institutions expect. With regulators watching crypto prediction markets more closely, even jurisdictions like Portugal ordering a stop to political betting, standardized stablecoin infrastructure provides the platform with a stronger foundation as it scales toward mainstream finance.
Historically, Polymarket relied on USDC.e, a bridged version of Circle’s USDC stablecoin. While functional, bridged assets can add complexity and additional risks. By introducing its own token backed one-to-one with USDC, Polymarket aims to simplify settlement and improve liquidity management.
Users holding USDC or USDC.e will need to wrap their funds into Polymarket USD using a smart contract function. This process converts existing balances into the new collateral token so they can continue trading after the upgrade.
The shift positions Polymarket closer to the settlement standards that major financial institutions expect. With regulators watching crypto prediction markets more closely, even jurisdictions like Portugal ordering a stop to political betting, standardized stablecoin infrastructure provides the platform with a stronger foundation as it scales toward mainstream finance.
The move also sparked speculation among users. The platform could generate additional revenue by managing collateral flows internally. Others think the token could allow Polymarket to introduce incentives or yield-related features for users who keep funds on the platform.
The timing of the upgrade comes as Polymarket continues to navigate regulatory scrutiny, particularly in the United States. Strengthening infrastructure, improving compliance readiness, and supporting institutional participants could help the platform operate more smoothly in stricter regulatory environments.
By rebuilding its trading engine and introducing a dedicated collateral token, the prediction market platformis shifting from a simple retail prediction site into a more professional trading venue.
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