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 Fees Methodology

## 1. Overview

Fees measures the total value paid by users to execute trades across Polymarket's prediction market products. These fees are generated from automated market maker (AMM) interactions, order book transactions, and off-chain trading activities. The overall economic activity and cost of trading on Polymarket International, Polymarket Combos, and Polymarket US are reflected by this metric. Collected fees are used to compensate liquidity providers, market makers, and the protocol.

## 2. Data sources

- **Blockchain events**: `FPMMBuy` and `FPMMSell` events from `FixedProductMarketMaker` contracts, `OrderFilled` events from `Exchange` and `NegRiskCtfExchange` contracts, and ERC-20 `Transfer` events, covering Polygon
- **Off-chain data**: Scraped time-and-sales transaction reports for Polymarket US
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Polymarket International AMM fee extraction

- **Purpose**: Fees from V1 AMM trades are captured.
- **Logic**: `FPMMBuy` and `FPMMSell` events from `FixedProductMarketMaker` contracts on Polygon are parsed. The fee amount is extracted from the `feeAmount` field for each transaction. These fees are denominated in the USDC asset.
- **Key fields**: `block_timestamp`, `transaction_hash`, `feeAmount`, `token_address`

### Component B: Polymarket International and Polymarket Combos order book fee extraction

- **Purpose**: Fees from V1 and V2 order book trades are captured.
- **Logic**: For V1 order book fees, ERC-20 `Transfer` events of the USDC asset are tracked from designated V1 fee source contracts to V1 fee recipient addresses. For V2 order book fees, ERC-20 `Transfer` events of the pUSD asset to V2 fee recipient addresses are tracked, filtered by transactions containing `OrderFilled` events from `Exchange` or `NegRiskCtfExchange` contracts. Transfers originating from the Polymarket Combos exchange address are classified under Polymarket Combos, while all other order book transfers are classified under Polymarket International.
- **Key fields**: `block_timestamp`, `transaction_hash`, `from_address`, `to_address`, `value`, `token_address`

### Component C: Polymarket US off-chain fee calculation

- **Purpose**: Taker fees for Polymarket US trades are calculated from scraped transaction reports.
- **Logic**: Scraped time-and-sales raw trade data is processed daily. Taker fees are calculated based on a historical fee schedule using transaction timestamps, asset prices, quantities, and specific coefficients. For standard trades, the fee is calculated as `taker_theta * quantity * price * (1 - price)`. For combo trades after the combo curve start date, the fee is calculated as `quantity * price * (taker_theta * (1 - price) + combo_coefficient * (1 - price)^4)`. Trades occurring before the fee start date are assigned a fee of zero, and trades during the transitional period are calculated as `0.01 * quantity * price`.
- **Key fields**: `transaction_time`, `price`, `quantity`, `symbol`, `is_combo`

### Component D: USD conversion and aggregation

- **Purpose**: All fee amounts are normalized to USD and aggregated on a daily basis.
- **Logic**: On-chain fee amounts are normalized by decimal precision using asset metadata and converted to USD using end-of-day asset prices. Off-chain Polymarket US fees, which are already denominated in USD, are combined with the converted on-chain fees. All fees are aggregated by day, chain, and product using UTC day boundaries.
- **Key fields**: `timestamp`, `fees`, `product_id`, `chain_id`

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

Total value users pay to use a protocol (gross fees, user-paid fees).

Polymarket

Fees

Fees

Competitive landscape

Chain breakdown