Hardcore Breakdown of Polymarket's Fee Formula: How Did the Extreme Rate of 90+% Pop Up?
Polymarket, a prediction market platform, recently faced backlash due to unexpectedly high transaction fees, with some users reporting fees as extreme as 94.8%. The issue stemmed from a temporary change in the fee calculation formula.
The platform initially used an "old formula": fee = C × p × feeRate × (p × (1 - p))^exponent. However, a brief update to an "abnormal formula" removed a critical "× p" term, becoming: fee = C × feeRate × (p × (1 - p))^exponent. Since share prices (p) are always less than $1, this omission drastically increased fees, especially for very low-priced shares (near $0.001), as the fee was no longer scaled by the price. An exponent value of 0.5 in certain markets ("Weather" and "Economy") further exacerbated the curve, leading to the extreme rates.
Polymarket quickly responded by implementing a "new formula": fee = C × feeRate × p × (1 - p), effectively setting the exponent to 1. This change significantly reduced fees, particularly for extreme price points, bringing maximum fees down to around 5%.
The article advises users to avoid high fees by using limit orders (which are free and even offer a 20-25% maker rebate) or the platform's "Split" function to indirectly establish positions instead of market orders.
Odaily星球日报04/01 03:57
