Polymarket is overhauling its exchange infrastructure in the coming weeks, introducing a new collateral token and an upgraded trading engine that give the platform tighter control over settlement and risk as it moves toward closer alignment with US regulatory expectations.
In a Monday announcement, Polymarket said it will deploy new exchange contractsโVersion 2โdesigned to simplify how orders are structured and matched. The upgrade aims to boost trading efficiency and make it easier for developers to connect apps and trading bots to the platform.
The upgrade also expands on-chain compatibility by adding support for EIP-1271, the Ethereum standard that allows smart contract wallets, including multisigs and automated trading systems, to sign transactions, broadening support beyond traditional externally owned wallets.
A central feature is the introduction of Polymarket USD, a new collateral token that will replace USDC.e, Polymarketโs bridged version of USDC. The new token is fully backed 1:1 by USDC, giving Polymarket greater direct control over its settlement layer and reducing reliance on bridged assets.
For most users, the transition will be automatic through the platformโs interface, requiring only a one-time approval. The rollout is expected to unfold over the coming weeks, though Polymarket did not provide a precise date.
Key regulatory backdrop and market implications
The upgrade comes as Polymarket continues to adapt to evolving US regulatory expectations, including efforts to curb manipulation and insider-trading risks as it seeks to strengthen market integrity and align more closely with US standards.
In November, Polymarket won approval from the Commodity Futures Trading Commission to operate an intermediated trading platform in the United States, clearing the way for its return after previously exiting the market. Following that approval, Polymarket said it plans to onboard brokers and customers directly and facilitate trading through regulated US venues.
Interest in prediction markets has continued to grow, with users increasingly trading real-world outcomes tied to politics, markets, and policy. Industry data have shown Polymarketโs fee revenue rising in recent weeks after a pricing overhaul, underscoring the demand for these platforms.
Market data provider DeFiLlama tracks Polymarketโs revenue indicators and has highlighted the platformโs uptick as it expands fee-based income alongside its technological upgrade.
Beyond the user-facing changes, the upgrade is designed to strengthen the platformโs connective tissue for developers and automated traders, while giving Polymarket enhanced control over its settlement pipeline and a more cohesive collateral framework to manage risk.
What this means for users and developers
For everyday users, the transition should be largely seamless: the one-time approval triggers the automatic switch to the new system, and existing accounts will be supported by the updated interface. Traders and developers can anticipate easier integration with external apps and bots thanks to the simplified order structure and standardized settlement flow.
Polymarketโs ongoing push toward regulatory-aligned operation could attract more traditional market participants, brokers, and liquidity providers, potentially broadening the range of real-world events offered for trade.
Looking ahead, observers will watch how quickly the new infrastructure gains traction among users and whether regulatory clarity translates into faster onboarding of US participants via regulated venues.
As Polymarket advances its technical overhaul, the timing of regulatory milestones, the pace of onboarding, and the robustness of the new collateral approach will be key determinants of the platformโs next phase of growth.
