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 Open interest Methodology

## 1. Overview

Open interest measures the total USD notional value of all open positions on Polymarket at a point in time. It is utilized as a leading indicator of speculative activity and capital at risk across the platform's prediction markets. For Polymarket US, open interest is derived from daily market reports. For Polymarket International, open interest is calculated based on the total value of collateral locked within the settlement contracts, reflecting that contracts are fully collateralized.

## 2. Data sources

- **Blockchain events**: ERC-20 `Transfer` events and native asset transfers associated with Polymarket International settlement contracts, covering Polygon
- **Off-chain data**: Daily market reports for Polymarket US
- **External data**: End-of-day price feeds for collateral assets

## 3. Step-by-step calculation

### Component A: Polymarket US open interest extraction

- **Purpose**: Extract open interest for Polymarket US from daily market reports
- **Logic**: Daily market reports are scraped to retrieve the reported open interest for each market symbol. These values are aggregated daily to calculate the total open interest for Polymarket US.
- **Key fields**: `business_date`, `open_interest`, `symbol`

### Component B: Polymarket International collateral tracking

- **Purpose**: Track the net flows of collateral assets for Polymarket International
- **Logic**: ERC-20 `Transfer` events and native asset transfers are parsed for specific Polymarket International settlement contract addresses (`0x4d97dcd97ec945f40cf65f87097ace5ea0476045` and `0x3a3bd7bb9528e159577f7c2e685cc81a765002e2`) on Polygon. Daily net flows are calculated by subtracting outgoing transfers from incoming transfers for each asset.
- **Key fields**: `timestamp`, `account_address`, `token_address`, `value`

### Component C: Polymarket International open interest calculation

- **Purpose**: Determine the open interest for Polymarket International based on locked collateral
- **Logic**: Daily net flows are accumulated over time to calculate the running balance of each collateral asset held by the settlement contracts. These balances are normalized by decimal precision and multiplied by end-of-day asset prices to determine the total USD value locked (TVL). Because Polymarket International contracts are fully collateralized, this TVL is equated directly to the open interest.
- **Key fields**: `balance`, `price_usd`, `tvl`

### Component D: Final aggregation and forward-filling

- **Purpose**: Combine open interest across products and apply forward-filling
- **Logic**: Open interest values from Polymarket US and Polymarket International are combined. A forward-filling strategy is applied to ensure continuous daily data. For Polymarket US, the forward-filled values are capped at the last available business date reported by the exchange.
- **Key fields**: `timestamp`, `product_id`, `open_interest`

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

Total USD notional value of all open positions on a derivatives protocol at a point in time.

Polymarket

Open interest

Open interest

Competitive landscape

Chain breakdown