Polymarket

Polymarket is widely described — including by itself — as the world's largest prediction market: you trade yes/no contracts on real-world outcomes — elections, sports, economics, crypto, culture — priced between $0.01 and $0.99, settling at $1 if you're right and $0 if you're wrong, against other traders on an order book. It operates two separate venues: the international exchange runs on crypto rails (self-custodied wallets, USDC-backed pUSD on Polygon, UMA oracle resolution) and is restricted in the US, while Polymarket US is a CFTC-regulated exchange (QCX LLC) with USD accounts, KYC, and rule-based settlement that launched December 2, 2025. Both venues now charge taker fees. It is a trading venue, not an investment platform: nothing pays yield, and every dollar won is another trader's dollar lost.

Polymarket US is — it operates under a CFTC designation (QCX LLC, designated July 9, 2025) and relaunched for US users on December 2, 2025, though it is unavailable in Nevada under a January 2026 restraining order and several states are litigating event contracts generally (Rhode Island sued both Polymarket and Kalshi in May 2026; Kentucky sued in June). The international venue is a different matter: it remains restricted to US users — the 2022 CFTC settlement required exactly that — and an application filed April 28, 2026 to let US users onto the main exchange is still pending. So the precise answer is: the US product is legal federally with active state fights; using the offshore product from the US violates its terms and the history of enforcement here is real.

They are separately operated venues under one brand. Polymarket International is the original crypto exchange: funds live in your own wallet as pUSD (a USDC-backed token on Polygon), outcomes resolve through the UMA Optimistic Oracle (disputed cases are decided by token-holder votes), fees are taker-only by category (0.04-0.07, geopolitics free), and US users are restricted. Polymarket US (QCX LLC) is a CFTC-designated contract market: USD-only deposits into segregated accounts, retail users become their own clearing members, resolution follows each contract's published rules, fees are 0.06 × C × p × (1 − p) for takers with maker rebates, and you get a 1099-B. Custody, fees, resolution, taxes, and legal exposure all differ — most guides that treat 'Polymarket' as one platform are wrong about at least one of these.

Neither label fits cleanly. It is clearly not investing in the portfolio sense: event contracts create no ownership interest, yield, or claim on any asset — they are zero-sum derivative positions against other traders. Whether the sports contracts are legally gambling is the exact question in litigation across the category: Nevada's regulator won a restraining order against Polymarket, Rhode Island and Kentucky are suing, Polymarket has preemption suits pending against three states, and the federal circuits split on the same question in the Kalshi cases in 2026. Economically, hedging a real exposure with an event contract is risk transfer; buying sports parlays is wagering-like zero-sum economics on exchange rails, and should be sized accordingly whatever the courts decide.

Some traders do — it is a zero-sum market, so every winner is matched by a loser, now minus fees on both venues. The honest base case: Polymarket's prices are widely cited precisely because they aggregate information well, which makes durable edges rare; absent a genuine informational or structural edge, expect a zero-sum payoff before costs and a negative return after fees and the spread. AltStreet's own 15,685-market microstructure study — which found four apparent edges that all dissolved as sampling artifacts — analyzed Kalshi, not Polymarket, so we do not extrapolate it here; the zero-sum arithmetic, however, is venue-independent. The defensible uses are information and hedging, not profit-seeking.

It depends entirely on which venue. On the international venue, you custody your own funds: pUSD in your wallet, USDC backing enforced by audited smart contracts (with an admin pause gate) — no bank, no insurance, no regulator; wallet security is your job. On Polymarket US, funds are USD in a segregated Member Property Account under CFTC segregation rules — but the settlement bank is not named in any public document, no deposit-insurance treatment is disclosed, the participant agreement contains a no-refund clause, and the clearing rulebook lets the clearinghouse invest or commingle member cash without notice and retain the profits, and decline withdrawals for its own protection. The FAQ's assurance that Polymarket US 'cannot access or use your money' should be read alongside those reserved powers; the rulebook is the binding document.

Both venues now charge trading fees — the 'no fees' era ended in 2026. Polymarket US (since July 1, 2026): takers pay 0.06 × contracts × price × (1 − price), peaking at $1.50 per 100 contracts at 50¢; makers receive a rebate (−0.0125, up to $0.31 per 100); high-volume takers earn 10-50% rebates, and there's an 'Accelerated Tier' honoring proof of volume on another prediction market. The international venue charges takers by category — crypto 0.07 ($1.75 per 100 at 50¢, the same as Kalshi's standard), sports and economics 0.05 ($1.25), politics and finance 0.04 ($1.00), geopolitics free — and never charges makers; USDC deposits and withdrawals carry no venue fee. All formulas peak at 50¢ because p(1−p) is largest there. On thin markets, the spread usually costs more than the fee.

Four documented ways. Trading fees, now on both venues (the US taker fee has been raised three times in seven months; the international venue charges 0.04-0.07 by category). Data distribution: ICE — which invested $1.64 billion and holds about 22% of the company — distributes Polymarket's event-driven data to institutional customers globally. Technology licensing: SEGG's Sports.com Predict runs exclusively on Polymarket's stack under a revenue-share through 2029, and Polymarket is the official prediction-market partner of X and Stocktwits. And float: the US clearing rulebook explicitly reserves the right to invest member cash and retain the profits. What each stream earns is unknown — no entity in the stack publishes financial statements.

Three separate chapters. In January 2022, Polymarket's parent Blockratize settled with the CFTC for $1.4 million over operating an unregistered event-binary facility and agreed to block US users. In November 2024, days after the election, the FBI raided CEO Shayne Coplan's home as the DOJ investigated whether US users had kept trading; the DOJ and CFTC closed those investigations without charges on July 15, 2025. Then on June 26, 2026, the CFTC opened a new, broad probe — first reported by the Wall Street Journal, whose review of 1,105 paid promotional videos found roughly 70% showed simulated trades presented as real wins — extending beyond marketing into other operations. The new probe is pending and is not an enforcement action; it is also the only active CFTC probe AltStreet identified among platforms in its coverage as of August 30, 2026.

By venue. Polymarket US delivers IRS Form 1099-B electronically (it's in the participant agreement), and the open question is character — whether event contracts get Section 1256's 60/40 futures treatment or ordinary treatment is unsettled among practitioners, the same debate as on Kalshi. The international venue sends no US tax forms at all, and because trading runs through pUSD/USDC, crypto property-transaction treatment can layer on top of the trading gains themselves — genuinely messier, with the full recordkeeping burden on you. Both venues' APIs export complete trade histories; do that, and resolve treatment with a tax adviser before trading at scale.

Three surfaces, not two. Kalshi is one US-regulated stack (CFTC exchange, bank custody at a named bank, 1099s, a steady 0.07 fee formula). Polymarket is two venues: the international crypto exchange (among the largest and most liquid event markets anywhere, self-custody, UMA resolution, 0.04-0.07 category fees, US-restricted) and Polymarket US (CFTC-designated, USD custody at an unnamed bank, 0.06 taker fee with maker rebates after three increases in seven months). At 50¢, 100 contracts cost $1.75 in taker fees on Kalshi, $1.50 on Polymarket US, and $1.00-$1.75 (or $0 in geopolitics) internationally. Attributed June 2026 open interest ran ~$1.02B on Kalshi versus ~$488.5M international and ~$91.6M on Polymarket US — while July volume data showed Kalshi leading; the liquidity answer depends on the metric. Conduct records differ sharply: our Kalshi scan located no CFTC action; Polymarket has a 2022 settlement and an active probe. And identical-looking markets can resolve differently — compare resolution rules before comparing prices. AltStreet's full Kalshi review covers the other side of this comparison.

Price gaps between the venues exist and traders pursue them — but a same-titled market is not the same contract. Before treating a combined YES+NO price below $1 as arbitrage, verify: the exact question wording, the deadline and time zone, the resolution source (UMA proposals and token-holder votes on Polymarket International; contract rules on Polymarket US; exchange rules on Kalshi), edge-case and clarification language, the bid/ask and depth at your size (not the last trade), both venues' fees, halt and cancellation rules, and whether you can even legally hold both legs from your jurisdiction. Differently resolving contracts turn 'arbitrage' into basis risk with two sets of costs — the trade is real only after the rules match.

Blockratize Inc., a private New York-based company founded by CEO Shayne Coplan, doing business as Polymarket; it owns the international venue and, since the July 2025 QCEX acquisition (reported at $112 million), the US-regulated QCX exchange and QC Clearing clearinghouse. Its disclosed Form D record shows about $226 million raised across two offerings — but the dominant outside shareholder is ICE, the NYSE's parent, which per its own filings invested $1.64 billion for roughly 22% of outstanding shares, one board seat, and 'significant influence.' No financial statements are published; press-reported valuations ($8 billion pre-money at ICE's 2025 entry, higher figures since) appear in no Blockratize filing. An active SPV ecosystem — eight Hiive series, MW LSV, Dominari, and others — resells its equity to accredited investors.