Original | Odaily Planet Daily (@OdailyChina)
Author | Golem (@web3_golem)
On April 6, Polymarket announced a major upgrade to the platform in the next 2 to 3 weeks, including upgrading both CTF and CLOB to V2, and replacing the platform collateral from USDC.e to the native stablecoin Polymarket USD.
According to the official introduction, Polymarket USD is 1:1 backed by USDC. For most users, the transition from USDC.e to Polymarket USD is seamless, with the frontend handling it automatically—users only need to confirm once. For advanced users and API-only traders, the transition process might be a bit more complex but still not difficult; they need to wrap their USDC or USDC.e into Polymarket USD through the wrap() function of the collateral access contract.
On the surface, Polymarket is merely changing the trading collateral in the backend. As the platform grows, continuing to use USDC.e is indeed a potential issue. Back in February, Circle and Polymarket had already announced plans to migrate bridged USDC.e to native USDC, and this is just a normal progression of that cooperation.
However, Polymarket did not choose to directly introduce native USDC to replace USDC.e; instead, it added an extra layer, aiming to pool USDC within its own treasury. The name of this layer is Polymarket USD. Therefore, the emergence of Polymarket USD is definitely a "One more thing" (Odaily Note: "One more thing" is a classic tradition of Apple keynotes, now symbolizing a company's finale move or industry-disrupting actions).
Polymarket Gains the Right to Mint Currency
The first layer of significance is that Polymarket can pool user funds.
Previously, money deposited by users into Polymarket would become USDC.e. You can think of it as Polymarket being a huge trading venue—it only handles matching, pricing, and清算; the money flows through it, but the money itself does not belong to its system. Polymarket is not a treasury.
But that's about to change. When USDC.e is replaced with Polymarket USD, Polymarket can reach out to that money which was originally just "passing through." As Polymarket officially stated, the daily user experience is unaffected, but the actual on-chain settlement path behind the scenes has been altered. This transformation is no less significant than an exchange transitioning from relying on third-party清算机构 to building its own清算 center.
Polymarket USD is 1:1 backed by USDC, meaning that for every Polymarket USD in the market, there will be a corresponding USDC in Polymarket treasury. Currently, every Yes/No share pair on Polymarket is backed by USDC.e. When players place bets or settle, USDC.e also moves on-chain. But after switching to Polymarket USD, although it will also move on-chain with user operations, the USDC in Polymarket treasury won't experience any movement because of it. Therefore, as long as users don't come to redeem, this money is essentially属于 Polymarket.
Polymarket has gone from being a use case for a stablecoin to反过来掌握ing the on-chain minting right. Polymarket USD diverts user assets from the "open sea" to Polymarket's "internal lake." Once funds begin to pool, Polymarket is no longer just a prediction trading platform, and its business model doesn't have to rely solely on trading fees, because it can start playing the oldest "money makes money" game in finance.
Increasing Polymarket's Revenue Channels
The second layer of significance is the expansion of Polymarket's business.
The current business model of prediction markets is simple: charging transaction fees. After Polymarket adjusted its fee mechanism on March 30 (Odaily Note: Expanding the taker fee scope to include Finance, Politics, Economics, Culture, Weather, and other market categories, in addition to the original Crypto and Sports categories), its daily fee revenue has surpassed $1 million.
Polymarket's Daily Fee Revenue
Although impressive, it's not enough to satisfy Polymarket's ambitions. Prediction markets, while currently the most sought-after sector, have a business model with a relatively low ceiling, a single moat (regulatory approval), and not exceptionally high user stickiness. In the current landscape where everyone is doing prediction markets, how can Polymarket ensure it won't be surpassed by competitors in the future?
The answer it gives is: I don't just match trades; I can also put players' money to work.
From a business essence perspective, the most attractive aspect of stablecoins over the years has never been fast payments and transfers, but the low-profile yet highly profitable money-printing machine behind them—reserve asset yield. In 2025, the vast majority of Circle's revenue still came from reserve income. Polymarket understood this model, so it launched Polymarket USD.
According to Dune data, the value of open interest on the Polymarket platform has exceeded $400 million. If all this money is converted into Polymarket USD, Polymarket只需要把底层抵押的 USDC 都存进 Circle 的机构账户或者放到美债协议里,按 4%-5% 的无风险利率算,每年坐着不动就能收几千万美金的“利息税”。
Defillama founder 0xngmi even directly stated that Polymarket user wallets hold approximately $1.25 billion. If they keep this interest income, at current rates, they would earn an additional $54 million annually. Polymarket could even participate in DeFi yield farming with higher APYs, turning the idle funds on the prediction platform into active leverage, and then returning the maturity proceeds to users, effectively hedging for them.
Polymarket's Daily OI and Trading Volume Curve
Prediction markets naturally have two characteristics: first, fund滞留, and second, high-frequency reallocation driven by events. Users' money doesn't truly enter and exit instantly like in a casino; it's either already in a position or sitting in an account waiting for the next event, the next odds change. This type of money is most suitable for financial reprocessing, and for users, there's also a beautiful excuse: improving capital efficiency.
Of course, Polymarket hasn't publicly stated yet that it will definitely engage in yield extraction or on-chain wealth management after launching the stablecoin. But this path is almost a natural next step. As long as the scale of Polymarket USD grows larger in the future, it naturally gains the space to do yield management, collateral expansion, and financial combinations within the platform.
Some time ago, the 《CLARITY Act》 faced resistance for potentially prohibiting crypto companies from offering interest on stablecoins to users. If the outcome of the dispute remains a prohibition, all the above演绎 of Polymarket USD's potential will come to naught. However, on April 6, according to US media reports, the core disagreement between the US crypto industry and banks over the stablecoin yield mechanism may be接近解决. Although details have not been disclosed, the overall expectation is optimistic, and the 《CLARITY Act》 may enter the deliberation stage in committee in late April.
So, don't think Polymarket is far from this.
Polymarket Gains USDC Distribution Rights
The launch of the stablecoin by Polymarket has a third layer of significance: gaining USDC distribution rights.
From today's perspective, Polymarket is still a major distribution scenario within the USDC ecosystem. Circle provides native USDC, Polymarket distributes USDC, and both sides are harmonious. Polymarket is currently experiencing strong growth. Undoubtedly, the USDC reserves pooled within its platform will become larger in the future, potentially even becoming a distribution channel as important as Coinbase. When that time truly comes, the relationship between Polymarket and Circle might also sour.
A reality in the stablecoin world is that distribution rights are as important as issuance rights, which is why Coinbase can take away over half of Circle's reserve income. Therefore, in the future, when Polymarket becomes an important distributor of USDC, it will also inevitably grow bargaining power and will be entitled to take a large share of the reserve收益.甚至, when Polymarket USD is mature enough, it can explore multi-collateral backed stablecoins, not just putting all its eggs in the USDC basket.
This is also why I believe Polymarket USD is not an ordinary upgrade for Polymarket, but an identity update. Polymarket will evolve from a "platform collecting fees围绕事件波动" to one that also兼具 "platform organizing and清算围绕美元".
The former is casino logic, while the latter is bank logic.
Polymarket's moat has thus gained another layer. It still maintains the beautiful narrative of information as a market and pricing facts early. But in terms of its business model, it is quietly moving itself towards a more important position—no longer satisfied with being surface-level market traffic, no longer satisfied with仅仅靠赔率吸引用户, and no longer satisfied with continuing to leave the fattest part of the industry chain (asset reserve收益) to others.
