Polymarket Explained: How Prediction Markets Work in 2026
Polymarket lets you trade on the outcomes of real-world events—elections, economic data, pop culture, and more. It’s grown fast and drawn attention from traders, journalists, and regulators. Here’s how it works and what’s at stake.
What Is Polymarket?
Polymarket is a decentralized prediction market built on blockchain. You buy shares in outcomes—e.g., “Will X happen?” Shares pay $1 if the outcome occurs, $0 if not. Prices between 0 and 100 cents reflect the market’s implied probability. You can buy or sell anytime before the event resolves.
What Can You Trade?
Political events dominate—elections, cabinet picks, policy decisions. Economic indicators, Fed decisions, and crypto prices appear too. There are markets on awards shows, sports, and miscellaneous events. New markets go up regularly; popular ones can have millions in volume.
How Resolution Works
Events are resolved by designated resolvers using authoritative sources—news outlets, official results, etc. Disputes can arise when sources disagree or when outcomes are ambiguous. Polymarket has improved resolution processes, but edge cases remain.
Regulation and Controversy
Regulators have questioned whether Polymarket amounts to unlicensed gambling or securities trading. The platform has adjusted its model in some jurisdictions. Users should check local laws. Beyond regulation, there’s debate about whether prediction markets distort incentives—e.g., encouraging bad behavior if someone profits from a negative outcome.
Using Polymarket Responsibly
Treat it like any speculative activity. Don’t invest more than you can afford to lose. Markets can be wrong; past accuracy doesn’t guarantee future results. Use it as a tool for curiosity and learning—not as a primary source of income.