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 Trading volume Methodology

## 1. Overview

Trading volume measures the total value of prediction market trades executed on Polymarket. Activity from both the automated market maker (AMM) and the order book exchange is included, covering both Polymarket International and Polymarket US. This metric serves as a primary indicator of liquidity and user engagement within the prediction market ecosystem.

## 2. Data sources

- **Blockchain events**: `FPMMBuy` and `FPMMSell` events from `FixedProductMarketMaker` contracts, and `OrdersMatched` events from V1 and V2 `Exchange` and `NegRiskCtfExchange` contracts, covering Polygon
- **Off-chain data**: Time-and-sales reports for Polymarket US
- **External data**: End-of-day price feeds for collateral assets (USDC for V1, pUSD for V2)

## 3. Step-by-step calculation

### Component A: AMM trade extraction

- **Purpose**: Capture volume from the Fixed Product Market Maker (AMM) exchange.
- **Logic**: `FPMMBuy` and `FPMMSell` events are parsed from `FixedProductMarketMaker` contracts. For buy events, the `investmentAmount` is extracted. For sell events, the `returnAmount` is extracted. These values represent the collateral value (USDC) entering or exiting the liquidity pools during a swap.
- **Key fields**: `investmentAmount`, `returnAmount`, `block_timestamp`

### Component B: Order book trade extraction

- **Purpose**: Capture volume from the limit order book exchange.
- **Logic**: `OrdersMatched` events are parsed from V1 and V2 `Exchange` and `NegRiskCtfExchange` contracts. To prevent double-counting, `OrdersMatched` events are utilized instead of individual fill events, as each match represents a single trade execution. For V1, the trade value is identified by determining which side of the trade (maker or taker) corresponds to the collateral asset (asset ID '0'). For V2, the `side` field indicates the trade direction: 0 (BUY) means the maker provides collateral, 1 (SELL) means the taker provides collateral. V1 trades are denominated in USDC; V2 trades are denominated in pUSD.
- **Key fields**: `makerAssetId`, `takerAssetId`, `side`, `makerAmountFilled`, `takerAmountFilled`, `block_timestamp`

### Component C: Polymarket US trade extraction

- **Purpose**: Capture volume from Polymarket US.
- **Logic**: Off-chain time-and-sales reports are parsed. For each trade, the trading volume is calculated by multiplying the trade price by the quantity. These trades are already denominated in USD.
- **Key fields**: `price`, `quantity`, `transaction_time`

### Component D: Normalization, USD conversion, and aggregation

- **Purpose**: Standardize trade values into a common currency for aggregation.
- **Logic**: For Polymarket International, extracted amounts are normalized by decimal precision and multiplied by end-of-day price feeds to determine the USD equivalent. For Polymarket US, the calculated USD trading volume is used directly. All values are aggregated by day using UTC boundaries, with a zero-filling strategy applied to ensure continuity in the time series.
- **Key fields**: `token_address`, `timestamp`, `price_usd`, `trading_volume`

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

Total value of spot trades executed on the exchange.

Polymarket

Trading volume

Trading volume

Competitive landscape

Chain breakdown