Interpreting Polymarket's Major Update Last Night: Fee Expansion, Self-Regulation, and New Incentives

Original Title: "Interpreting Polymarket's Major Update Last Night: Fee Expansion, Self-Regulation, New Incentives"

Original Author: Asher, Odaily Planet Daily

Last Saturday, Polymarket's official team member Mustafa posted on Platform X stating that a major announcement would be made next Monday.

Polymarket Official Team Member Weekend Update

True to his word, Polymarket's official team last night through today issued multiple updates, and next, Odaily Planet Daily will take everyone through each one in detail.

Update Market Integrity Rules, Anti-Insider Trading, Anti-Manipulation

Last night, Polymarket announced an update to its DeFi platform and its CFTC-regulated U.S. trading platform's market integrity rules, further clarifying regulatory requirements for insider trading and market manipulation.

Polymarket's Chief Legal Officer Neal Kumar stated: "Market integrity relies on transparency. The refinement of these rules clarifies our expectations for all participants on both platforms and underscores the compliance infrastructure we have built. As Polymarket continues to grow, we will continue to strengthen our existing foundation, ensure our market operates at its best by transparently communicating with users, and reveal the truth."

The new rules detail three categories of prohibited behavior, specifically including:

Trading on Nonpublic Information: Participants shall not trade on confidential information about the outcome or potential outcome of a subject event if using that information would violate a pre-existing trust or confidentiality obligation to others or entities.

Establishing Positions Based on Illegally Sourced Information: Participants shall not trade using confidential information provided by others if that information was provided by a person with a pre-existing trust or confidentiality obligation to others, and if the participant knows or has reason to know the provider would be prohibited from trading on that information;

Entities with the Ability to Influence Event Outcome Participating in Trading: Participants shall not engage in any contract trading if they have the authority or influence to affect the outcome of the subject event.

At the same time, the platform explicitly prohibits fake trades, wash trades, and price manipulation, and has launched a dedicated page to explain the rules and provide a channel for reporting suspicious activities. Furthermore, Polymarket states that its DeFi platform employs on-chain transparency and multi-layer monitoring systems for risk identification, with the U.S. platform combining technological monitoring with collaboration with industry regulatory bodies to investigate and penalize any misconduct.

This round of rule updates is essentially redefining Polymarket's market boundaries: what information can be traded and what behavior is directly excluded. Around insider information, information sources, and the ability to influence event outcomes, the platform has transformed the previously ambiguous gray areas into a clear "non-participatory" red line, while introducing monitoring and reporting mechanisms to place trading activities within a more traceable framework.

More importantly, this signifies a shift in the platform's positioning. Polymarket is moving away from the external image of a "high-risk gambling den" to emphasize the market infrastructure of information pricing and transparency. By actively strengthening compliance and rule enforcement, it aims to gain trust from regulators and the public, laying the groundwork for further expansion.

The Era of "High Fees" Is Coming: All Markets Will Charge Fees Except Geopolitical Events

According to the latest official Polymarket documentation, starting March 30, 2026, the platform will adjust its fee structure. In addition to the existing Crypto and Sports categories, various new market categories such as Finance, Politics, Economics, Culture, and Weather will be included in the taker fee charging range.

The new fee rates will be calculated using a dynamic formula directly related to the price range. Overall, the new fee structure will exhibit a "high in the middle, low at the extremes" distribution: as the price approaches a 50% probability, the actual fee rate peaks, while in the extreme ranges near 0% or 100%, fees significantly decrease, possibly even rounding to 0 in minimal trades.

Under the current fee system, the peak effective fee rate for the Crypto market is around 1.56%, and for Sports, it is about 0.44%. With the new fee structure set to take effect, the discrepancies between different categories will widen further. For example, the peak fee for Crypto will be around 1.80%, Finance and Politics about 1.00%, and Economics up to 1.50%. Additionally, corresponding liquidity provider rebate rates have been established, with Finance offering as high as 50% and most other categories around 25%.

The fee calculation method is based on a unified formula, dynamically calculated based on the overall transaction share, price, and various market parameters. The fee is denominated in USDC but is collected in "share form" on buy orders and deducted in USDC on sell orders.

New Market Fee Collection Standard

This is not related to funding or token airdrops, but an open referral program

This morning, Polymarket posted on X platform announcing that the referral program has expanded from the beta phase to all traders with a trading volume exceeding $10,000. Eligible users can receive a reward proportional to the trading volume of the new users they refer. The specific invitation rules are as follows:

· 30% of the fee rebate comes from direct referrals, and 10% comes from second-level referrals (the reward will be valid within the first 180 days after the user registers on Polymarket, this period may be subject to change without further notice);

· Fee rebate rewards are distributed once per day (UTC);

· There is no limit to the reward, the more the referred users trade on the platform, the more profit they will receive.

Polymarket Referral Interface

Liquidity Mining Rebate Plan Launched

In addition to the open referral program, to incentivize continuous and competitive quoting to provide a better trading experience for all traders, Polymarket has launched a Liquidity Mining Rebate Plan. Specifically, this mechanism reallocates a portion of the taker fees to the liquidity providers, redistributing transaction costs among market participants.

The rebate is settled daily in USDC, and only liquidity that has successfully placed orders and been traded will participate in the distribution. The overall yield is not a fixed value but is calculated based on the liquidity contribution ratio in actual trades. The more trades and higher contribution, the more rebate received accordingly.

In terms of allocation logic, the system calculates the "fee-equivalent value" for each trade, considering the trade amount, price, and market-specific fee rate parameters and aggregates within the same market. The final rebate is distributed based on the proportional contribution of each liquidity provider, indicating that competition is reflected not only in whether the quote is executed but also in the price range of the quote and its fee contribution. Overall, this rebate comes from the fees paid by takers, and the rebate percentages vary by market, for example, Crypto at 20%, Finance up to 50%, with most categories around 25%.

Rebate Proportion in Each Market

No Token Airdrop Information Yet, But Current Community Sentiment Overall Leans Optimistic

Although the community had previously expected that the "major announcement" might be related to a token or airdrop, the final reveal was an update combining transaction fees, rebates, and the referral system. Based on the outcome, this mechanism is more inclined towards long-term incentive design rather than a one-time token release expectation. However, the sentiment has not turned cold as a result. Instead, after the actual participation path became clear, the overall feedback from the trading community tended towards positivity.

Many users have already treated the referral program as a "quasi airdrop entry point," especially KOLs with their own traffic or community resources, significantly increasing their sharing efforts, some even directly treating it as a long-term income opportunity. After the launch of liquidity provider rebates, the feedback from the LP side was also very direct, with more people reevaluating their liquidity provision strategies, and the willingness to participate significantly increasing.

Comparatively, arbitrage traders and liquidation users are calmer. With the arrival of the new transaction fee rules, some previously viable arbitrage opportunities will be compressed, requiring a recalibration of strategies. The trading pace is also becoming more convergent, relying more on refined execution and cost control.

However, with Polymarket and Kalshi being closely monitored by regulators, the valuation in the coming period will be eroded by policy tensions. (Related News: U.S. lawmakers will introduce a bipartisan bill to ban sports prediction markets like Polymarket)

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