From 100% Refund to 20%: The Game Behind Polymarket Fee Adjustment

Author: DFarm

First, let’s organize a recent timeline of events related to Polymarket’s fee changes.

1. Polymarket suddenly announced that it would charge a fee for 15-minute digital currency price prediction trades, but the collected fees would be fully refunded to market makers (limit order traders).
2. The fee refund was changed from full refund to partial refund.
3. Until the 11th, 100% fee refunds stopped. From the 12th to the 18th, a 20% fee refund was provided.

Why charge a fee

We all know that Polymarket previously did not charge any fees for basic trades. Why is it now charging a fee specifically on the 15-minute digital currency market?

This requires understanding what a “delay arbitrage” bot is.

In markets with very short cycles like 15 minutes, outcomes are determined based on prices across major exchanges.

Without fees, high-frequency trading bots exploit millisecond-level price differences, placing orders before Polymarket’s prices update to make a profit.

For example, suppose the current 15-minute BTC UP (bullish) probability on Polymarket is 90%. Suddenly, the BTC price on an exchange drops by 5%. The bot detects this and immediately buys cheap DOWN (bearish). After the purchase, other bots or traders come in to buy and push the price back up, allowing the original bot to profit and exit.

What are the consequences of this behavior? It causes market makers to be repeatedly “cut” by these high-frequency bots, making them unwilling to continue providing liquidity through orders, ultimately leading to decreased liquidity in the 15-minute digital currency market.

Therefore, the platform introduced a fee mechanism at this time, especially when odds are 50:50 (as shown in the figure), making arbitrage costs for many bots higher than their profits, which naturally causes these bots to shut down.

Why subsidize market makers

As previously mentioned, market makers have had too much capital drained. To retain them, the platform shares part of the fees with those placing orders (market makers).

Why has the subsidy decreased from 100% to 20%?

The detail is in this sentence: “12-18 days, 20% fee refund,” which indicates that the refund rate after the 18th is still to be determined.

Initially, when the platform started charging fees, market makers were uncertain whether they could withstand bots. The platform then refunded 100% of the fees to cover their risks and retain liquidity.

Why is the refund now only 20%? Let’s look at the data:

After implementing the fee, the total fee volume halved, indicating that many high-frequency bots have indeed shut down.

Seeing the bots leave and market makers’ risks decrease, the platform might no longer need to refund 100%. Let’s first test with a 20% refund and observe the data.

This is why they trialed a 20% fee refund for a week, to see how the data performs before deciding on future refund rates.

All of this is about balancing the interests of market makers, bots, and regular traders.

“Printing press” bots

Many markets on Polymarket have “printing press” bots, and few people truly understand how they operate.

The most popular is a post by user @the_smart_ape on X:

This article has nearly 2 million views so far. Many friends have tried the strategies in the article, and some have indeed made profits.

But just a few days later, the fee was introduced, and many people could no longer profit…

So, have the “printing press” bots disappeared? Not at all. Interested friends can check out these “printing press” examples:

https://polymarket.com/@gabagool22?via=dfarm

https://polymarket.com/@distinct-baguette?via=dfarm

https://polymarket.com/@livebreathevolatility?via=dfarm

If you can crack their strategies, your own “printing press” isn’t far away. But remember, don’t tell others—just secretly tell me.

Final thoughts

In fact, on Polymarket, since there are no third-party commissions or fees, we are all betting against each other. As a platform, their responsibility is to provide a fair opportunity for both sides to compete.

Players who enjoy PVP games know that absolute fairness doesn’t exist; it’s about iterating versions to get as close as possible to fairness.

This also shows us that “printing press” bots do exist on Polymarket—it’s a game of skill and strategy.

If this article was helpful to you, please share it. Thank you.

For Polymarket beginners, be sure to check out this article → “Nanny-Level Tutorial: Step-by-Step Guide to Getting Started with Polymarket (Including Anti-Account Ban + Low-Spread Entry and Exit Strategies)”