# Polymarket International Expenses Methodology

## 1. Overview

Expenses measures the total cost incurred by Polymarket International to operate its prediction market platform. Included in this metric are maker rebates paid to liquidity providers, as well as liquidity and holding rewards distributed to users. These incentives are paid out in stablecoin assets (USDC and pUSD) to bootstrap liquidity and encourage trading activity. Tracking expenses is critical for evaluating the net profitability and user acquisition costs of the platform.

## 2. Data sources

- **Blockchain events**: ERC-20 `Transfer` events from specific rebate and reward distribution contracts, covering Polygon
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Maker rebate tracking

- **Purpose**: Capture maker rebates distributed to liquidity providers.
- **Logic**: ERC-20 `Transfer` events are parsed from designated maker and taker rebate distribution addresses on Polygon. Transfers of USDC and pUSD are tracked where the sender is one of the rebate distributor addresses and the recipient is not the protocol wallet. These transfers are aggregated daily to calculate the total cost of revenue.
- **Key fields**: `block_timestamp`, `token_address`, `amount`

### Component B: Liquidity and holding reward tracking

- **Purpose**: Capture liquidity and holding rewards distributed to users.
- **Logic**: ERC-20 `Transfer` events are parsed from designated liquidity and holding reward distribution addresses on Polygon. Transfers of USDC and pUSD are tracked where the sender is one of the reward distributor addresses and the recipient is not the protocol wallet. These transfers are aggregated daily to calculate total token incentives.
- **Key fields**: `block_timestamp`, `token_address`, `amount`

### Component C: USD conversion and final aggregation

- **Purpose**: Normalize rebate and reward amounts to USD and aggregate them into total expenses.
- **Logic**: Daily rebate and reward amounts are normalized by decimal precision using asset metadata. The normalized amounts are converted to USD using end-of-day price feeds. Total expenses are calculated by summing the USD-denominated maker rebates (cost of revenue) and reward distributions (token incentives) for each day.

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Total project operating and incentive expenses.

Expenses

Prediction markets

Liquidity providers deposit funds into Polymarket and receive trading fees from traders (supply-side fees). Polymarket has also launched a new peer-to-peer order book with no liquidity providers involved.

Polymarket is a non-custodial prediction market protocol built on Polygon. Polymarket was founded by Shayne Coplan and launched in 2020.

Polymarket team & investors own and govern the protocol. They do not currently take a cut of the total trading fees paid by traders (revenue). Polymarket's investors include Polychain, 1Confirmation, ParaFi Capital, etc.

Polymarket International

Expenses

Expenses

Chain breakdown