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.

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Polymarket

# Polymarket Average revenue per user (ARPU) Methodology

## 1. Overview

Average revenue per user (ARPU) is calculated as the daily revenue generated per active user on Polymarket. This metric is utilized to evaluate the daily monetization efficiency of the prediction market platform relative to its active user base. Daily revenue is divided by the active users (daily) to determine the average economic value contributed by each unique participant. This metric is key to understanding the relationship between user growth and protocol revenue generation.

## 2. Data sources

- **Revenue**: Derived from the Revenue metric
- **Active users (daily)**: Derived from the Active users (daily) metric

## 3. Step-by-step calculation

### Component A: Revenue tracking

- **Purpose**: To calculate the daily protocol revenue generated by Polymarket
- **Logic**: Daily protocol revenue is calculated as the difference between total fees and supply-side fees. Fees are collected from both AMM and order book trading activities on Polygon. AMM fees are extracted from `FPMMBuy` and `FPMMSell` events emitted by `FixedProductMarketMaker` contracts, where the `feeAmount` field is parsed. Order book fees are captured by tracking USDC transfers from V1 fee source contracts to V1 fee recipients, and Polymarket USD transfers to the V2 fee recipient. These V2 transfers are filtered to transactions containing `OrderFilled` events from `Exchange` and `NegRiskCtfExchange` contracts, or transfers sent from the Combos exchange address. Supply-side fees are defined as AMM fees before the orderbook start date, and taker rebates distributed to users after the orderbook start date. Prior to the orderbook start date, 100% of fees are allocated to the supply side, resulting in zero protocol revenue. After the orderbook start date, supply-side fees are calculated from taker rebates distributed to users, which are tracked as transfers from rebate distribution addresses to users, excluding the protocol wallet. Protocol revenue is calculated as total fees minus these supply-side fees. All collected amounts are normalized by decimal precision and converted to USD using end-of-day price feeds
- **Key fields**: `feeAmount` (AMM fee quantity), `value` (transfer amount), `token_address` (asset identification), `block_timestamp` (timing)

### Component B: Active user tracking

- **Purpose**: To determine the active users (daily) of Polymarket
- **Logic**: active users (daily) are identified by extracting unique user addresses from prediction market transactions on Polygon. For AMM-based markets, user addresses are extracted from the `buyer` and `seller` fields of `FPMMBuy` and `FPMMSell` events emitted by `FixedProductMarketMaker` contracts. For order book-based markets, user addresses are extracted from the `maker` and `taker` fields of `OrderFilled` events emitted by V1 and V2 `Exchange` and `NegRiskCtfExchange` contracts. These unique addresses are aggregated daily to calculate the active users (daily) metric
- **Key fields**: `buyer` (AMM buyer address), `seller` (AMM seller address), `maker` (order book maker address), `taker` (order book taker address), `block_timestamp` (timing)

### Component C: Average revenue per user calculation

- **Purpose**: To calculate the final average revenue per user (ARPU) metric
- **Logic**: The average revenue per user is calculated by dividing the daily protocol revenue by the active users (daily). This division is performed using a safe division function to prevent division-by-zero errors. The resulting daily ARPU values are generated at a daily granularity with UTC day boundaries
- **Key fields**: `revenue` (daily protocol revenue in USD), `user_dau` (active users (daily))

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

Polymarket

Average revenue per user (ARPU)

Average revenue per user (ARPU)

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