Polymarket will rebuild its core engine, introduce a hybrid CLOB, and launch Polymarket USD, a USDC‑backed stablecoin on Polygon aimed at cheaper, more institution‑friendly trading.
Summary
- Prediction market Polymarket plans its “largest infrastructure upgrade” in the next 2–3 weeks, overhauling its matching engine and smart contracts.
- The upgrade will introduce a new hybrid CLOB model and a native stablecoin, Polymarket USD, pegged 1:1 to USDC on Polygon.
- The changes aim to cut gas costs, boost efficiency, and make the platform friendlier to institutions via EIP‑1271 and multi‑sig support.
On‑chain prediction market Polymarket will roll out what it calls “the largest infrastructure upgrade since its launch” in the coming 2–3 weeks, rebuilding its core trading engine and debuting a native dollar stablecoin, Polymarket USD, according to plans shared with The Block. The company said the overhaul will “completely reconstruct” its matching engine via a new CTF Exchange V2 smart‑contract system, while introducing a native stablecoin pegged 1:1 to USDC to replace the current bridged USDC.e on Polygon. Existing order books will be cleared during the migration, with Polymarket promising to give users at least one week’s notice before maintenance begins.
At the heart of the upgrade is a redesigned Central Limit Order Book that uses a hybrid model of off‑chain order matching combined with on‑chain, non‑custodial settlement. In technical documentation for its CTF Exchange, Polymarket describes the architecture as a “hybrid‑decentralized model” where an operator handles off‑chain matching while settlement remains on‑chain, a setup it says optimizes “performance and security” for high‑volume event markets. The Block reports that CTF Exchange V2 will introduce new matching logic and order‑data structures intended to improve matching efficiency and reduce gas costs for traders.
Polymarket has grown into one of the largest fully on‑chain prediction venues, recently drawing hundreds of millions of dollars in liquidity and a $600 million strategic investment from Intercontinental Exchange (ICE) as part of a broader bet on decentralized betting markets. ICE said its combined $1.6 billion of direct and secondary investment is not expected to be material to its financial results but positions the exchange operator as a key backer in what it calls a “David and Goliath battle” to bring prediction markets into the financial mainstream.
On the asset side, Polymarket USD formalizes a shift already underway in partnership with Circle to move from bridged USDC.e to native USDC on Polygon for all trading, order placement, and settlement. Circle has said native USDC, redeemable 1:1 for US dollars through its regulated entities, offers a “capital‑efficient” and more secure alternative to bridged tokens by eliminating cross‑chain bridge risk and tying collateral directly to its reserves. In line with that, Polymarket USD will be pegged 1:1 to USDC and used as the core collateral across the platform, with deposits from networks such as Ethereum, Solana, Arbitrum, and Base automatically converted into the new stablecoin on Polygon.
Polymarket will also add support for the EIP‑1271 (ERC‑1271) standard, allowing smart‑contract wallets such as Safe to validate signatures and trade directly, a move aimed at “expanding use cases for institutions and advanced users.” EIP‑1271 lets contracts define an isValidSignature method with arbitrary logic, making it easier for DAOs, funds, and multi‑sig setups to participate in non‑custodial markets without relying on externally owned accounts. The upgrade comes as competition in prediction markets intensifies, with Polymarket using performance, native dollar liquidity, and institutional‑grade wallet support to defend its lead in what it brands “The World’s Largest Prediction Market.”
