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 Supply-side fees Methodology

## 1. Overview

Supply-side fees measures the share of transaction fees that is distributed to service providers and market participants on Polymarket. During the automated market maker (AMM) phase of the protocol, all collected fees are allocated to the supply side. Following the transition to the order book model, supply-side fees are represented by taker rebates distributed to traders on Polymarket International. Polymarket US is excluded from this metric because trader-specific rebates are not published on-chain.

## 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
- **External data**: End-of-day price feeds for USDC and pUSD, and asset metadata

## 3. Step-by-step calculation

### Component A: Polymarket AMM fee extraction

- **Purpose**: Capture fees generated during the AMM phase of the protocol
- **Logic**: AMM fees are extracted from `FPMMBuy` and `FPMMSell` events emitted by `FixedProductMarketMaker` contracts on Polygon. Fee amounts are parsed from the fee amount field, normalized by decimal precision, and converted to USD using end-of-day price feeds.
- **Key fields**: `block_timestamp` (timing), `amount` (fee quantities), `token_address` (token identification)

### Component B: Polymarket International taker rebate tracking

- **Purpose**: Capture taker rebates distributed to traders on Polymarket International
- **Logic**: Taker rebates distributed to traders on Polymarket International are tracked via ERC-20 `Transfer` events. Transfers of USDC and pUSD from the designated taker rebate distributor address to user addresses are aggregated, while transfers to the protocol wallet are excluded. The transfer amounts are normalized by decimal precision and converted to USD using end-of-day price feeds.
- **Key fields**: `block_timestamp` (timing), `amount` (rebate quantities), `token_address` (token identification)

### Component C: Supply-side fee allocation

- **Purpose**: Combine and allocate supply-side fees based on the protocol phase
- **Logic**: Supply-side fees are determined based on the protocol's operational phase. For historical dates prior to the orderbook start date, supply-side fees are set equal to total fees. For dates on or after the orderbook start date, supply-side fees are set equal to the daily taker rebates distributed on Polymarket International. Polymarket US is excluded from the final aggregation.
- **Key fields**: `timestamp` (timing), `fees_supply_side` (allocated supply-side fees)

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

Portion of fees distributed to service providers or supply-side participants.

Polymarket

Supply-side fees

Supply-side fees

Competitive landscape

Chain breakdown