# Polymarket US Fees Methodology

## 1. Overview

The total value paid by users to execute trades on Polymarket US is measured by the Fees metric. Taker fees are generated from trading activity and are calculated using a predefined fee schedule based on transaction prices and quantities. These values are utilized to evaluate the economic activity and revenue-generating capacity of the platform. All calculations for Polymarket US are performed using off-chain trade data.

## 2. Data sources

- **Off-chain data**: Time-and-sales reports and report file metadata from the Polymarket US scraper

## 3. Step-by-step calculation

### Component A: Polymarket US trade data extraction

- **Purpose**: Extract raw trade records from the scraper reports.
- **Logic**: Raw trade records are extracted from the latest time-and-sales reports. For each trade, the transaction time, file date, symbol, price, and quantity are parsed. Combo trades are identified by checking if the symbol starts with a specific prefix, and the league is extracted from the symbol.
- **Key fields**: `transaction_time`, `symbol`, `price`, `quantity`

### Component B: Polymarket US fee coefficient determination

- **Purpose**: Determine the fee coefficients based on transaction time and market type.
- **Logic**: Taker theta and combo coefficients are assigned based on the transaction time and league. If the trade belongs to a table tennis league and occurs after the table tennis fee start threshold, a taker theta of 0.10 is applied. Otherwise, the taker theta is set to 0.0695, 0.06, or 0.05 depending on the historical transaction time window. The combo coefficient is set to 0.06 or 0.04 based on the transaction time.
- **Key fields**: `transaction_time`, `league`

### Component C: Polymarket US taker fee calculation

- **Purpose**: Calculate the fee amount for each individual trade.
- **Logic**: Fees are calculated for each trade based on its classification and transaction time. Trades occurring before the initial fee activation threshold are assigned a fee of zero. For trades occurring before the theta 0.05 start threshold, the fee is calculated as 1% of the total trading volume (price multiplied by quantity). For combo trades occurring after the combo curve start threshold, the fee is calculated using a specialized curve formula incorporating both the taker theta and the combo coefficient applied to the price and quantity: `quantity * price * (taker_theta * (1 - price) + combo_coefficient * (1 - price)^4)`. For all other standard trades, the fee is calculated by multiplying the taker theta by the quantity, price, and the complement of the price: `taker_theta * quantity * price * (1 - price)`. All calculated fees are rounded to two decimal places using half-even rounding.
- **Key fields**: `price`, `quantity`, `taker_theta`, `combo_coefficient`

### Component D: Polymarket US daily aggregation

- **Purpose**: Aggregate calculated fees to a daily granularity.
- **Logic**: Individual trade fees are aggregated by truncating the transaction time to the day level. The daily fees are summed to produce the total fee metric for Polymarket US. These values are represented under the off-chain chain identifier and the Polymarket US product identifier.
- **Key fields**: `transaction_time`, `taker_fee`

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

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

Fees

Prediction markets

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.

Polymarket US

Fees

Fees

Chain breakdown