Prediction market platform Polymarket has launched a groundbreaking rewards program offering users up to 4% annualized returns for maintaining long-term positions. This strategic move significantly enhances the platform’s competitive edge while providing substantial incentives for committed traders. Consequently, market participants can now earn consistent returns simply by holding eligible contracts in selected high-profile markets.
Understanding Polymarket’s Reward Structure
The Polymarket rewards program operates through a sophisticated calculation system. Importantly, rewards are based on position values in specifically chosen contracts. The platform samples user positions hourly using random timing. Subsequently, these samples determine daily payouts at the annualized 4% rate. Moreover, the system evaluates eligible positions by multiplying share quantities with current mid-prices.
Eligible Markets and Contract Selection
Polymarket has carefully selected high-impact political and global events for its rewards program. Currently, eligible markets include:
- 2028 U.S. presidential election outcomes
- Presidential nomination races
- Russia-Ukraine ceasefire predictions before 2027
- Other major geopolitical events
These selections prioritize contracts requiring accurate long-term pricing. Furthermore, they attract significant trading volume naturally.
Technical Implementation and Daily Operations
The Polymarket rewards system employs advanced technical mechanisms. Specifically, position values are calculated using real-time market data. The platform then distributes rewards daily through automated processes. Additionally, Polymarket funds the program directly from its treasury. This approach ensures sustainable reward distribution without affecting market liquidity.
Competitive Landscape and Market Position
While Polymarket introduces these innovative rewards, competitor Kalshi currently leads in trading volume. Recent data shows Kalshi processed $728 million weekly compared to Polymarket’s $456 million. However, open interest figures reveal a closer competition. Kalshi maintains $182 million in open positions versus Polymarket’s $160 million. Therefore, the new rewards program aims to bridge this gap effectively.
Regulatory Developments and Future Expansion
Polymarket recently achieved significant regulatory progress. The platform obtained a No-Action Letter from the CFTC. This clearance allows legal operation of event-based contracts in the United States. Consequently, Polymarket rewards can now expand to American users. The company also plans to introduce a streamlined one-click position transfer system later this year.
Program Sustainability and Future Adjustments
Polymarket emphasizes the program’s long-term viability. The treasury-funded model ensures consistent reward distribution. However, the platform may adjust rates or implement caps if necessary. Currently, all eligible markets receive the same 4% annualized rate. Future modifications will depend on market conditions and program performance.
Frequently Asked Questions
How often are Polymarket rewards distributed?
Rewards are calculated and distributed daily, though the 4% figure represents an annualized rate.
Which markets qualify for the rewards program?
The program currently focuses on major political and global event contracts, including U.S. elections and geopolitical developments.
How does Polymarket calculate position values?
Position values are determined by multiplying share quantities by their current mid-prices during hourly random sampling.
Can reward rates change over time?
Yes, Polymarket may adjust rates or implement caps based on market conditions and program sustainability.
Is the rewards program available to U.S. users?
Yes, following recent CFTC regulatory clearance, U.S. users can participate in the rewards program.
How does Polymarket fund the rewards program?
The program is directly funded from Polymarket’s treasury, ensuring consistent reward distribution.
