Polymarket Announces Major Rule Updates, Fee Adjustments, and Incentive Programs

Original | Odaily Planet Daily (@OdailyChina)

Author | Asher (@Asher_0210)

Last Saturday, Polymarket's official team member Mustafa posted on X that a major announcement will be revealed next Monday.

Polymarket official team members' activities over the weekend

As expected, Polymarket's official account released multiple major updates last night through today. Odaily Planet Daily will now walk you through each one step by step.

Last night, Polymarket announced updates to its DeFi platform and market integrity rules for its CFTC-regulated U.S. exchange, further clarifying regulatory requirements regarding insider trading and market manipulation. Neal Kumar, Chief Legal Officer of Polymarket, said: “Market vitality depends on transparency. These refined rules make our expectations clear for all participants on both platforms and highlight our established compliance infrastructure. As Polymarket continues to grow, we will continue to strengthen our foundation by clearly communicating with users to ensure our markets deliver their greatest strength—revealing the truth.”

The new regulations specify three prohibited activities, including:

• Trading on non-public information: Participants shall not engage in any trading of contracts if they possess confidential information regarding the outcome or potential outcomes of the relevant event, and using such information would violate a pre-existing duty of trust or confidentiality owed to others or entities.
• Building positions based on illegal information sources: Participants shall not trade using confidential information provided to them by others, if such information was provided by someone who has a prior duty of trust or confidentiality to another party, and the participant knows or has reason to know that the person providing the information would themselves be prohibited from trading on that information;
• Entities with the ability to influence the outcome of an event are prohibited from trading: Participants who possess the authority or influence to affect the outcome of the underlying event must not engage in any contract trading.

At the same time, the platform explicitly prohibits false trading, wash trading, and price manipulation, and has launched a dedicated page to explain the rules and provide a channel for reporting suspicious activities. Additionally, Polymarket states that its DeFi platform employs on-chain transparency mechanisms and a multi-layered monitoring system for risk detection, while the U.S. platform combines technical monitoring with collaboration with industry regulators to investigate and penalize violations.

This round of rule updates fundamentally redefines Polymarket’s market boundaries: what information can be traded and what behaviors are explicitly excluded. By focusing on insider information, sources of information, and the ability to influence event outcomes, the platform has clarified previously ambiguous gray areas into clear “prohibited”红线, while simultaneously introducing monitoring and reporting mechanisms to bring trading activities into a more traceable framework.

More importantly, this points to a shift in the platform’s positioning. Polymarket will move away from its external perception as a “high-risk gambling arena” and instead emphasize itself as a market infrastructure focused on information pricing and transparency, proactively strengthening compliance and clear rule-setting to earn trust from regulators and the public, laying the groundwork for broader future expansion.

According to the latest official documentation from Polymarket, the platform will adjust its fee structure starting March 30, 2026, extending the taker fee to include additional market categories such as Finance, Politics, Economics, Culture, and Weather, in addition to the existing Crypto and Sports categories.

The new fee rate is calculated using a dynamic formula directly tied to the price range. Overall, the new fee structure follows a "high in the middle, low at the ends" distribution: when the price is near the 50% probability level, the actual fee rate peaks, while fees drop significantly near the extreme ranges of 0% or 100%, and may even be rounded to zero for very small trades.

Under the current fee structure, the peak effective rates for Crypto markets are approximately 1.56%, and for Sports, approximately 0.44%. Under the upcoming fee structure, differences across categories will be further widened—for example, Crypto peak rates will be around 1.80%, Finance and Politics around 1.00%, and Economics up to 1.50%. Simultaneously, maker rebates for each category have been set accordingly—for instance, Finance at 50%, with most other categories around 25%.

Fees are calculated using a unified formula that dynamically considers trade volume, price, and various market parameters. Fees are denominated in USDC, but collected in "volume form" for buy orders and deducted in USDC for sell orders.

New fee structure for each market

This morning, Polymarket announced on the X platform that its referral program has expanded from beta testing to all traders with trading volumes exceeding $10,000. Eligible users will receive rewards proportional to the trading volume of their referred new users, with the following referral details:

• 30% of the fee rebate comes from direct referrals, and 10% of the fee rebate comes from secondary referrals (the reward is valid for the first 180 days after the user registers with Polymarket; this period may be subject to change without prior notice);
• Fee rebates are distributed once daily (UTC);
• Unlimited rewards—the more your referred users trade on the platform, the more you earn.

Polymarket referral interface

In addition to opening the referral program, Polymarket has launched a market-making rebate program to incentivize continuous and competitive pricing, enhancing the trading experience for all traders. Specifically, this mechanism reallocates a portion of taker fees to market makers who provide liquidity, redistributing trading costs among market participants.

Rebates are settled and distributed daily in USDC, and only liquidity that has been successfully posted and filled participates in the distribution. Total earnings are not fixed but calculated based on your proportional contribution to the traded liquidity—the more trades your liquidity contributes to, the higher your rebate.

Logically, the system calculates the "fee equivalent value" for each trade, aggregating trade volume, price, and fee parameters across different markets within the same market. Rewards are then distributed proportionally based on each market maker's contribution, meaning competition is not only about whether a quote is filled, but also about the price level of the quote and its fee contribution. Overall, these rewards originate from taker-paid fees, with varying reward percentages across markets—for example, 20% for Crypto, up to 50% for Finance, and approximately 25% for most categories.

Rebate rates for each market

Although the community previously anticipated that the "major announcement" might refer to a token or airdrop, the final rollout consisted of a combined update to fees, rebates, and the referral system. In outcome, this mechanism leans more toward long-term incentive design rather than a one-time release of expectations. However, sentiment did not cool; instead, it turned more positive once clear pathways for participation were established.

Many users have come to view the referral program as a disguised airdrop, especially KOLs with existing traffic or community resources, who have noticeably increased their sharing efforts—some even treating it as a long-term income stream. Since the market-making rebates launched, LPs have responded directly, with more participants reassessing their market-making strategies and showing significantly higher willingness to engage.

In comparison, arbitrage traders and order-closing users tend to be more level-headed. After the new fee structure takes effect, some previously viable arbitrage opportunities will be narrowed, requiring strategies to be recalculated and trading rhythms to become more restrained, with greater reliance on precise execution and cost control.

However, after Polymarket and Kalshi came under regulatory scrutiny, their valuations over the coming period will be pressured and eroded by policy developments. （Related news:U.S. lawmakers will introduce a bipartisan bill to ban sports betting on prediction markets like Polymarket）