Polymarket: What fees are charged?

Polymarket's fee structure includes market creator fees, trader fees, and winner fees, with JUNE token holders earning a portion of the fees collected through a profit-sharing mechanism, fostering platform sustainability and rewarding market creation.

Feb 12, 2025 at 04:54 am

Key Points:

• Polymarket fee structure for different types of markets and options
• Details of market fees, including creator fees, trader fees, and winner fees
• Process of earning fees as a market creator
• Information on Polymarket's JUNE governance token and its role in fee distribution
• Explanation of fee waivers and discounts available to specific users

Polymarket Fee Structure

Polymarket operates on a fee-based model that encompasses various fee types based on the nature of markets and options. These fees are essential for ensuring the platform's sustainability and rewarding market creators for their contributions to the ecosystem. Here is a breakdown of the key fees and their purpose:

• Market Creator Fees: Market creators on Polymarket pay a one-time fee to create a market or question. This fee varies depending on the market type and the desired duration. The platform uses a dynamic pricing algorithm to determine the exact fee amount. The fee structure incentivizes the creation of high-quality markets while discouraging spam and irrelevant questions.
• Trader Fees: Traders engaging in market trading pay a transaction fee to place bets or trade options. This fee is a percentage of the bet amount, typically ranging from 0.5% to 5%, with higher fees applicable to shorter-term markets. Trader fees contribute to the liquidity and efficiency of Polymarket's markets, ensuring traders have access to a fair and transparent trading environment.
• Winner Fees: Winners of resolved markets are subject to a winner fee. This fee is a percentage of the winnings, typically around 5%, and is deducted from the payout. The winner fees are designed to support the platform's infrastructure and incentivize market creation.

Earning Fees as a Market Creator

Market creators on Polymarket have the opportunity to earn fees from the markets they create. The fees earned are proportional to the volume of trades and options purchased in the market. Creators receive a percentage of the market's trading volume, typically around 1%, as their compensation. The platform's fee structure encourages market creators to design and maintain markets that attract traders and contribute to Polymarket's overall functionality.

JUNE Governance Token and Fee Distribution

Polymarket's native governance token, JUNE, plays a crucial role in fee distribution. A portion of the fees collected by the platform is designated for JUNE holders through a profit-sharing mechanism. JUNE holders can stake their tokens on Polymarket to earn rewards from these fees, creating an incentive for active participation in the ecosystem's governance and decision-making.

Fee Waivers and Discounts

Polymarket offers fee waivers and discounts to encourage specific activities on the platform. Market creators who meet certain criteria, such as creating markets with high liquidity or educational value, may be eligible for fee discounts. Additionally, the platform sometimes offers promotional periods with reduced or waived fees to boost trading activity and market participation. These incentives aim to foster a thriving and engaged ecosystem on Polymarket.

FAQs

1. How are market creator fees calculated?

Market creator fees vary based on the market type and duration and are determined by a dynamic pricing algorithm. The algorithm considers factors such as market complexity, volatility, and potential liquidity to arrive at an appropriate fee.

2. Can market creators negotiate their fees?

Market creators typically do not have the ability to negotiate their fees with Polymarket. The platform's fee structure is designed to ensure fairness and consistency across all markets and creators. However, in specific cases, the Polymarket team may consider fee adjustments for exceptional markets or creators who contribute significant value to the platform.

3. Are winner fees refundable if the market is canceled or unresolved?

Winner fees are not refundable if a market is canceled or left unresolved. The fees are deducted from the winnings to support the Polymarket platform and incentivize market creation. When a market is canceled, all bets are refunded to traders, but the winner fees are still collected.

4. How often are fees distributed to JUNE holders?

Fees are distributed to JUNE holders on a weekly basis. The amount of fees distributed is determined by the platform's revenue and the amount of JUNE staked by holders.

5. Can I earn fees without creating markets?

Yes, you can earn fees without creating markets by staking your JUNE tokens on Polymarket. Staking JUNE allows you to receive a portion of the fees collected by the platform, providing a passive income stream.