How does Polymarket work: trader's primer
If you want a concise answer to how does Polymarket work: Polymarket is a decentralized prediction-market exchange on Polygon where users buy and sell outcome shares that pay $1 if they resolve YES and $0 if NO. Trading runs on a Central Limit Order Book (CLOB) using pUSD as the settlement asset; Polymarket sponsors gas via a Relayer so orders are gasless for users. Prices across outcomes sum to $1.00 at fair value, which creates clear arbitrage opportunities that PolyArb is built to detect and execute.
Core mechanics: markets, shares, and settlement
Markets are binaries or multi-outcome events. Each outcome is an ERC-1155 CTF token; buying a complete set costs $1.00 and entitles you to the winning $1.00 after resolution. Polymarket uses UMA for resolution, so disputes can pause settlement until UMA finalizes the result.
Trades execute on a CLOB. The platform exposes public APIs (Gamma, Data, CLOB) and a market WebSocket for real-time books. Tick size, maker/taker dynamics, and variable taker fees determine execution economics; makers pay no fees while taker fees vary by category.
Why prices sum to $1 and how arbitrage appears
In binary markets YES and NO should sum to $1.00; multi-outcome markets should sum to $1.00 across all outcomes. When the sum of best asks across complementary outcomes is less than $1.00, there is a mathematical edge: buy the legs and hold a complete set until resolution, locking the difference as gross edge.
That intra-market edge drives rapid activity. Historically, arbitrageurs extracted significant value on Polymarket. PolyArb automates detecting and capturing intra-market arbitrage with low latency and guaranteed minimum edge per trade.
Practical limits and risks you must know
No trade is unconditional 'risk-free.' Resolution can be delayed by UMA disputes, settlement takes time, fills can be partial, and fees or slippage can reduce net profit. Smart-contract and regulatory risks also exist; Polymarket geo-blocks certain countries and prohibits VPN circumvention.
PolyArb quantifies these risks into its execution model: it targets intra-market arb spreads beyond fee and slippage thresholds and provides a $7.62 minimum guaranteed edge per trade as part of its product offering, while remaining non-custodial.
Where PolyArb fits: automation and execution
Polymarket provides the market rails; PolyArb is an add-on trading bot and signal service. For $99/month you get a non-custodial bot with ~40ms latency, Telegram and Discord alerts, and order execution tuned for low-latency CLOB fills. That contrasts with free bots that typically run much slower and without guaranteed edge.
If you trade arbitrage manually, PolyArb reduces monitoring and execution overhead. It is focused on intra-Polymarket arbitrage (buying complementary legs inside the same market) and does not attempt cross-platform arbitrage.
Try PolyArb and automate Polymarket arbitrage
Start a non-custodial trial of PolyArb for $99/month to get 40ms latency, Telegram + Discord alerts, and automated intra-market execution with a $7.62 minimum guaranteed edge.
FAQ
- How are trades settled on Polymarket?
- Trades settle in pUSD, Polymarket's wrapped USDC on Polygon. Winning outcome tokens are redeemable for $1.00 each after UMA reports resolution; disputes can delay final settlement.
- What creates an arbitrage opportunity on Polymarket?
- An intra-market arbitrage exists when the sum of best-ask prices for complementary outcomes is below $1.00. Buying the complete set at that price and redeeming the winner captures the difference, subject to fees, slippage, and resolution risk.
- Is PolyArb custodial and what does $7.62 guaranteed edge mean?
- PolyArb is non-custodial. The $7.62 minimum guaranteed edge refers to the product's advertised per-trade gross edge threshold it targets in its execution logic; actual net returns depend on fills, fees, and settlement timing.