# Polymarket US Notional trading volume Methodology

## 1. Overview

Notional trading volume is defined as the total value of contracts executed on Polymarket US. This metric is utilized to assess the overall trading activity and liquidity within the prediction markets. Since trading fees are generated on executed trades, notional trading volume is highly correlated with the platform's capacity to generate revenue. For Polymarket US, trading activity is captured from off-chain transaction records and is represented by the aggregate quantity of contracts traded.

## 2. Data sources

- **Off-chain data**: Time-and-sales reports scraped from Polymarket US, covering the off-chain environment

## 3. Step-by-step calculation

### Component A: Trade data extraction

- **Purpose**: To extract raw trade records from scraped time-and-sales reports.
- **Logic**: Raw trade data is extracted from scraped time-and-sales reports. Only files designated as "time-and-sales" reports are processed. The latest loaded files are selected based on the insertion timestamp to prevent duplicate processing. For each trade, the transaction time, symbol, price, and quantity are retrieved.
- **Key fields**: `transaction_time`, `symbol`, `price`, `quantity`

### Component B: Notional volume calculation

- **Purpose**: To calculate the daily notional trading volume.
- **Logic**: The daily notional trading volume is calculated by aggregating the quantity of contracts traded. For each transaction, the quantity is treated as the number of contracts, where each contract is valued at a face value of $1. The quantities are summed and grouped by day based on the transaction timestamp.
- **Key fields**: `quantity`, `transaction_time`

### Component C: Final aggregation

- **Purpose**: To format and prepare the final metric.
- **Logic**: The daily notional trading volume is mapped to the off-chain chain identifier and the Polymarket US product identifier. The final dataset is populated with zeros for any days with missing activity to ensure a continuous time series.
- **Key fields**: `timestamp`, `product_id`, `chain_id`, `notional_trading_volume`

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

Total USD value of derivative contracts executed on the protocol.

Notional trading volume

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

Notional trading volume

Notional trading volume

Chain breakdown