Polymarket is changing an essential part of its crypto infrastructure. The platform deploys Protocol V2, a new smart contract architecture intended to gradually replace a system based on code dating back to 2019. pUSD becomes the sole collateral, several types of markets will be able to operate on the same exchange and future expansion beyond Polygon is already planned. The first tests are underway.
In brief
- Polymarket is testing Protocol V2 in a limited number of markets until October 30.
- New markets could move to V2 from November 2.
- Currently open positions will not be automatically migrated.
Polymarket simplifies its crypto infrastructure
The change comes as Polymarket is experiencing considerable activity. A Galaxy study has just analyzed 2.9 million individual accounts on the platform, 69.2% of which ended in loss.
Behind these millions of users, the technical architecture was starting to date. The current system is based on code developed in 2019. Adding new market types still requires the deployment of additional contracts.
Protocol V2 seeks to reduce this complexity. The new version uses a single contract to manage the tokens representing positions and an exchange capable of supporting multiple market categories.
Polymarket also adopts pUSD as its sole collateral. Introduced in a previous upgrade in April, this token is backed 1:1 by Circle’s USDC. Users therefore continue to work with an asset linked to the dollar, but through a layer specific to Polymarket. Currently, only a few markets use V2. The real shift must come next.
Protocol V2 also prepares for post-Polygon
Polymarket currently runs on Polygon, the network that processes its transactions and on which pUSD is issued. This activity has sometimes weighed heavily in the network’s figures. In February, Polymarket notably helped push Polygon’s fees above those of Ethereum.
Protocol V2 is now preparing for wider operation. The new architecture is designed to enable the transfer of positions, collateral and market outcome data between multiple blockchains.
Polymarket has, however, announced neither the networks concerned nor the date of a possible cross-chain launch. Expansion beyond Polygon therefore remains a planned capability in the architecture, not yet an available product.
Another change: smart contracts are becoming scalable. Polymarket will be able to modify them via a secure governance process, instead of having to multiply new contracts for each functionality.
A system called OracleAggregator should also make it possible to connect different oracles. UMA and Chainlink are among the solutions planned to determine the outcome of the markets. Technically simpler. But also easier to evolve.
The old markets will not move
Polymarket avoids a brutal migration. Currently open positions will remain on Protocol V1. They will not be converted to the new infrastructure. For users of the application or site, no significant technical manipulation is planned. Some may simply need to authorize new smart contracts when they start trading on V2 markets.
Security also occupied a large part of the site. The new contracts were audited by Cantina, Quantstamp and Zellic. Certora has carried out a formal verification. Polymarket also offers up to 5 million dollars reward for a critical vulnerability discovered in the protocol.
The schedule remains progressive. Real-world testing is scheduled to continue until October 30. Polymarket then tentatively targets November 2 to begin creating new markets directly on V2.
This overhaul comes as the platform continues to grow despite a complicated regulatory situation in several countries. In France, Polymarket remains blocked after a decision by the National Gaming Authority. Protocol V2 does not address this issue. Above all, it prepares the machine for the future: more types of markets, simpler infrastructure and, ultimately, several blockchains.
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