Name: Polymarket Notional trading volume Metrics
Creator: Token Terminal
License: https://tokenterminal.com/terms

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 Notional trading volume Methodology

## 1. Overview

Notional trading volume measures the total value of contracts executed on Polymarket. This metric is used to evaluate the overall trading activity and liquidity across the platform's primary offerings, including Polymarket International, Polymarket US, and Polymarket Perps. Since trading volume is highly correlated with user engagement and market depth, key insights into the platform's growth and market share are provided by tracking this metric. All transaction values are normalized by decimal precision and denominated in USD.

## 2. Data sources

- **Blockchain events**: `OrdersMatched` events from `Exchange` and `NegRiskCtfExchange` contracts, covering Polygon
- **Off-chain data**: Scraped hourly klines for Polymarket Perps and scraped time-and-sales reports for Polymarket US
- **External data**: Asset metadata for decimal normalization

## 3. Step-by-step calculation

### Component A: Polymarket International order book trades

- **Purpose**: Capture the volume of contracts traded on the Polymarket International order book
- **Logic**: `OrdersMatched` events are parsed from `Exchange` and `NegRiskCtfExchange` contracts on Polygon for both V1 and V2. For V1, when the `makerAssetId` is '0', the share amount is extracted from the `takerAmountFilled` field; otherwise, if the `takerAssetId` is '0', the share amount is extracted from the `makerAmountFilled` field. For V2, when the `side` is 0 (representing a buy where the maker provides collateral), the share amount is extracted from the `takerAmountFilled` field; when the `side` is 1 (representing a sell where the taker provides collateral), the share amount is extracted from the `makerAmountFilled` field. These share amounts are used to represent the contracts traded and are aggregated daily.
- **Key fields**: `block_timestamp`, `makerAmountFilled`, `takerAmountFilled`, `makerAssetId`, `takerAssetId`, `side`

### Component B: Polymarket Perps trading volume

- **Purpose**: Calculate the trading volume for perpetual contracts
- **Logic**: Hourly kline data is scraped for perpetual instruments. For each hourly bar, the notional trading volume is calculated by multiplying the base volume by the average of the open, high, low, and close prices. These hourly volumes are then aggregated to a daily granularity.
- **Key fields**: `open_time`, `base_volume`, `open`, `high`, `low`, `close`

### Component C: Polymarket US trading volume

- **Purpose**: Capture the volume of contracts traded on Polymarket US
- **Logic**: Time-and-sales reports are scraped to extract individual trade records. The quantity of contracts traded is extracted for each transaction and aggregated daily to represent the notional trading volume.
- **Key fields**: `transaction_time`, `quantity`

### Component D: Decimal normalization and USD aggregation

- **Purpose**: Normalize all trading volumes to USD and aggregate them
- **Logic**: For Polymarket International, the aggregated share amounts are normalized by decimal precision using asset metadata. For Polymarket US and Polymarket Perps, the volumes are already denominated in USD and are integrated directly. All daily volumes across the products are then combined and aggregated to produce the final daily notional trading volume.
- **Key fields**: `timestamp`, `notional_trading_volume`

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