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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Prediction markets

Polymarket

# Polymarket Cost of revenue Methodology

## 1. Overview

Cost of revenue is measured as the expenses incurred by Polymarket International when distributing maker rebates to market participants. These promotional payments are distributed to incentivize liquidity on the platform. Rebates are paid out in USD Coin (USDC) and Polymarket USD from dedicated distributor contracts. By tracking these outbound transfers, the direct cost of maintaining market liquidity is quantified.

## 2. Data sources

- **Blockchain events**: ERC-20 token transfers from Polymarket maker rebate distributor contracts, covering Polygon
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Rebate transfer extraction

- **Purpose**: Identification and extraction of maker rebate distributions
- **Logic**: ERC-20 token transfers are filtered where the sender address is matched with designated Polymarket maker rebate distributor contracts. Transfers of USD Coin (USDC) and Polymarket USD are captured. Transfers to the Polymarket protocol wallet are excluded to ensure unspent balances returned to the protocol are not counted as expenses.
- **Key fields**: `block_timestamp`, `token_address`, `from_address`, `to_address`, `amount`

### Component B: Decimal normalization and USD conversion

- **Purpose**: Normalization of rebate amounts and conversion to USD
- **Logic**: Transfer amounts are normalized by the decimal precision of each respective asset using asset metadata. The normalized amounts are then multiplied by the end-of-day price of the asset to determine the USD value of each rebate payment.
- **Key fields**: `amount`, `decimals`, `price_usd`

### Component C: Daily aggregation

- **Purpose**: Aggregation of the cost of revenue to a daily grain
- **Logic**: The USD-denominated rebate values are aggregated by day using UTC boundaries. Missing days are filled with zeros to ensure a continuous time series.
- **Key fields**: `timestamp`, `cost_of_revenue`

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

Expenses paid to third parties to deliver core service output.

Polymarket

Cost of revenue

Cost of revenue

Competitive landscape

Chain breakdown