Polymarket unveils Protocol V2 and targets Nov. 2 switch to single pUSD market

What happened

Polymarket is replacing the smart contracts its prediction markets have run on since launch. Rajath Alex, the platform's head of protocol, introduced Polymarket Protocol V2 on X on Oct. 5. He described the work as a rebuild that starts from the position token.

A small set of canary markets began trading on V2 in production and will keep running through Oct. 30, Alex wrote. Polymarket has tentatively scheduled new markets to move to the system on Nov. 2. Data API v1 retires on Oct. 24, and developers must migrate to the Rust-based Data API v2 by that date.

V2 consolidates the old setup into a single ERC-1155 contract for positions, with pUSD as the only collateral, one exchange for all market types and one router. Position IDs now carry the market type, market and outcome. Four market modules ship at launch: binary, atomic neg-risk, incremental neg-risk and combinatorial. A new OracleAggregator handles resolution and can connect to UMA, Chainlink and future oracles.

Alex wrote that Cantina, Certora, Quantstamp, Sigma Prime, Zellic and Pashov Audit Group audited the code, and that Certora also formally verified it. A bug bounty pays up to $5 million for critical findings.

Why it matters

The platform was built on the Conditional Tokens Framework, general-purpose code Gnosis released in 2019. According to Alex, every market type added later needed its own contract stacked in front of that framework, including adapters for pUSD collateral, wrapped-collateral tokens for neg-risk markets, a second exchange and separate UMA adapters. He wrote that Polymarket runs on smart contracts that were not designed for what it became, and that each new feature meant another layer and another approval.

CoinGape reported that Kalshi won CFTC approval for S&P 500 perpetual futures on the same day Alex posted his announcement, and wrote that a unified collateral layer and a single router make it easier for professional market makers to run positions on Polymarket at scale. Polymarket recently secured a CFTC order to operate as a U.S. exchange.

For people using the app or website, no technical migration is required beyond accepting approval prompts, Polymarket's migration guide says. The guide adds that positions already held under the old framework will not be converted.

What the data shows

CoinGape's prediction-market screener put Kalshi at roughly $17.6 million in 24-hour volume against Polymarket's $12.3 million.

Chainlink's prediction-market oracle push has already settled over $7 billion in Polymarket volume, CoinGape wrote.

Polymarket pays up to $5 million for critical findings in the code, and V2 wraps USDC and USDC.e at a 1:1 ratio.

Background

The rebuild follows Polymarket's April overhaul, when it swapped the bridged USDC.e it had used on Polygon for pUSD, its own collateral token redeemable 1:1 for Circle's USDC.

Polymarket also released Data API V2, a Rust service running on its in-house onchain indexer.

What is still unclear

• The CFTC's broader Polymarket probe has not been resolved.
• The Nov. 2 cutover for new markets is tentative, existing CTF markets, positions and balances are not touched, and V2 runs as a separate ledger.

Questions readers ask