Polymarket Set to Upgrade Trading System Architecture
(Source: Polymarket)
Polymarket, a leading prediction marketplace, has announced major updates to its trading infrastructure slated for the coming weeks. The upgrade centers on the introduction of new collateral tokens and a revamped trading system, designed to bolster the platform’s control over asset settlement and risk management, while advancing compliance with US regulatory standards.
According to the official release, Polymarket will launch a new trading contract architecture, dubbed Version 2, which features optimized order structures and improved matching mechanisms. This upgrade will streamline trading workflows and boost overall efficiency. Beyond enhancing user experience, the new architecture will make it easier for developers to connect applications, trading tools, or automated bots to the Polymarket platform.
EIP-1271 Support Expands Wallet Compatibility
Technically, the new system will incorporate support for the EIP-1271 standard—an Ethereum protocol enabling smart contract-based wallets to sign trades, extending functionality beyond traditional personal wallets.
Key impacts of this update include:
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Enabling multi-signature (Multisig) wallets to participate in trading
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Supporting automated trading systems and strategy tools
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Increasing flexibility for institutional users and developers
This enhancement allows a broader range of users and applications to integrate seamlessly with Polymarket’s marketplace ecosystem.
Introducing Polymarket USD as New Collateral Asset
(Source: Polymarket)
A central feature of this upgrade is the launch of Polymarket USD, a new collateral token set to replace USDC.e (the cross-chain version of USDC) previously used on the platform. Polymarket USD offers:
Switching to Polymarket USD reduces reliance on cross-chain assets and grants the platform more direct authority over settlement processes.
For most users, this transition will be handled automatically through the platform interface. Users need only grant a one-time approval to complete asset migration. The platform has announced that the upgrade rollout will occur gradually over the next several weeks, though a precise timeline has yet to be disclosed.
US Market Re-entry and Regulatory Strategy
This technical upgrade aligns closely with Polymarket’s regulatory strategy. In recent years, Polymarket has implemented measures to mitigate risks like market manipulation and insider trading, aiming to enhance transparency and market credibility.
In November 2023, Polymarket received approval from the US Commodity Futures Trading Commission (CFTC) to operate as an intermediary trading platform in the United States, paving the way for its re-entry into the US market.
Following regulatory approval, Polymarket intends to:
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Collaborate directly with brokers
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Attract a larger user base
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Offer trading services within a regulated US environment
Growing Demand for Prediction Markets
Interest in prediction markets has surged in recent years. These platforms empower users to trade on outcomes of real-world events—such as political elections, financial market shifts, and significant policy decisions. With market expansion, trading activity on these platforms has risen. Industry data shows that after Polymarket adjusted its trading fee rate, the platform’s fee income has recently increased.
Conclusion
Through technical and institutional enhancements, Polymarket is establishing a robust foundation for future growth. The new trading architecture, Polymarket USD collateral token, and expanded wallet support will drive greater efficiency and system flexibility. As Polymarket secures regulatory approval and prepares to re-enter the US market, it continues to strengthen transparency and risk management. With rising demand for prediction markets, these infrastructure upgrades are poised to be pivotal in Polymarket’s ongoing expansion.
