Polymarket starts charging fees, behind which is a calm game of regulation, survival, and timing

1. It Suddenly Started Charging, But You Might Not Have Noticed

You may have seen pages like these:

• “Probability of Trump winning the 2024 election: 51.3%”
• “Federal Reserve rate cut probability in March: 68.7%”
• “LPL Spring Finals, BLG championship odds: 1.39”

This isn’t a betting site, nor media commentary, but a special entity in the Web3 world — Prediction Market.

Simply put, it’s a mechanism where you “vote” with real money: if you believe something will happen, buy a “Yes” contract; if you believe it won’t, buy a “No”. Prices fluctuate in real-time, and the final number reflects the “collective judgment” of thousands of people betting with their money.

Polymarket is currently the most popular, most active, and most cited on-chain prediction platform worldwide. It provides a clean webpage interface for users to trade directly using USDC stablecoin.

On January 6, 2026, it quietly updated its official website, adding a page called “Trading Fees” in the documentation, and announced: Starting now, markets of the “15-minute crypto price movement” type will incur a fee, up to 3%.

When this news broke, many longtime users’ first reaction was: “Huh? Wasn’t it always free before? How did it survive then?”

This question hits a common overlooked truth in the Web3 world: A seemingly cool tech product’s survival has never been just about code and ideals.

2. It Became Popular Due to Hot Topics, But Its Fate Depends on Regulation

Polymarket has indeed gone viral many times:

• During the 2022 Qatar World Cup, users bet on “Argentina winning,” with contract prices soaring;
• During the 2023 LPL Spring, esports fans traded team wins and losses in real-time on the platform;
• During the 2024 US election, daily trading volume peaked over $2.7 billion, and even The New York Times cited it as a source.

But what truly determines whether it can continue operating isn’t these lively events, but two words: Regulation.

Founded in 2020, Polymarket quickly gained support from well-known venture capital like Peter Thiel’s Founders Fund, and initially planned to expand across the US. But in January 2022, the U.S. Commodity Futures Trading Commission (CFTC) issued an enforcement order that directly halted its operations:

• Binary contracts like “Who will win Real Madrid vs Barcelona” or “Will the Federal Reserve cut rates” are considered regulated swap transactions, which require a license as a “Designated Contract Market” (DCM) or “Swap Execution Facility” (SEF)—which it did not have.

As a result? Polymarket paid a fine of $1.4 million and shut down all compliant risk markets for US users. On the surface, it’s a retreat; in reality, a strategic contraction: relocating the main entity out of the US, shifting funds to on-chain settlement, while still offering services globally — including to US users.

Interestingly, exiting the US market actually made it more “out of the box”.

During the 2024 election, it became a “non-official dashboard” for global observers tracking public opinion shifts; media referenced it before writing articles, traders used it for modeling, and researchers analyzed public sentiment via its API.

The real turning point came in November 2025: the CFTC officially approved its DCM application. This meant — it was no longer a “borderline innovative project,” but had obtained a “formal license” within the US financial regulatory system.

This fee isn’t a whim, but the first move after getting that license.

3. It Was Free for Six Years, Not Because It Had No Money, But Because It Was Waiting for a “Reliable Profit-Making Moment”

You might not know: most prediction markets have long been charging fees — common rates range from 0.5% to 3%. But since its launch in 2020, Polymarket has charged zero fees for all users and all markets.

This sparked widespread speculation: Is it surviving on venture capital? Selling data? Backed by big backers?

The more pragmatic answer is: It’s betting on a time window.

The value of prediction markets isn’t in how much they make per individual trade, but in whether enough people participate frequently enough to generate genuine, stable, and credible price signals. And “zero fees” is the most direct and effective way to attract traffic.

Over six years, it has achieved three things:

• In high-profile events like politics, sports, and crypto, it has become the de facto “default pricing center”;
• Its price data is repeatedly cited by Bloomberg terminals, academic papers, and hedge fund strategies, forming a factual standard;
• It has accumulated a multi-year, cross-cycle, cross-event, cross-region comprehensive probability dataset — a moat that no new platform can buy with money.

In other words, it exchanged the money it should have collected for more valuable assets: liquidity, influence, and data assets.

And the fee introduced on January 6, 2026, is a natural result of this long-term strategy:

• Only targeting “15-minute crypto price movement” markets, which are high-frequency, short-term, and easily manipulated by bots;
• Dynamic fee rates: the closer the price is to 50% (more uncertain), the higher the fee; the closer to 0% or 100% (more certain), the lower or even zero;
• All fees are not kept by the platform but are fully returned daily in USDC to market makers (those providing buy/sell quotes);
• The goal is practical: incentivize more orders, narrow bid-ask spreads, and enable quick trades even during sharp drops or surges.

Some say it’s to combat high-frequency bot trading; others think it’s to filter fake trades; some point out — fundamentally, it’s a stress test: within regulatory limits, to verify whether the fee mechanism can improve market quality rather than harm user experience.

It’s not “business as usual,” just that it can now “do business seriously.”

4. Small Entry, Big Space; Just Starting, Already Under Pressure

Don’t underestimate this “fee limited to one category.”

According to on-chain data analysis firm Gate Research compiled on Dune:

• Within two weeks of launching, Polymarket had collected about $2.19 million in fees;
• At current pace, weekly revenue is about $730,000, which projects to an annualized $38 million.

This is just for the “15-minute crypto price movement” niche. Currently, Polymarket covers areas including:

• US and global political elections
• World Cup, NBA, LPL, and other top sports events
• Macro events like Federal Reserve meetings, CPI releases
• Long-term topics like cryptocurrencies, real estate, AI advancements

Profit potential is far from fully unlocked.

But on the flip side: Compliance is never a one-time fix.

Getting a CFTC DCM license only means passing a federal “exam.” But the US is a federal system, and states have the authority to set their own financial and gambling laws. In mid-January 2026, the Tennessee sports betting regulator issued a cease-and-desist order to Polymarket and similar platforms like Kalshi, explicitly stating:

“Immediately stop offering sports event contracts to residents of this state, or face civil damages and criminal charges.”

Similar challenges are common worldwide:

• Japan’s FSA explicitly bans event contracts;
• UK’s FCA requires licensing, high collateral, and strict AML checks;
• All prediction markets within China are inaccessible, and policies explicitly prohibit them.

So, Polymarket’s next step isn’t reckless expansion but continuous adaptation:

• Establishing localized compliant entities in different jurisdictions;
• Defining clear boundaries between “financial instruments” and “entertainment” products;
• Exploring cooperation with traditional financial institutions to turn probability data into risk management inputs.

Will it become a “perennial” in the Web3 world? The answer isn’t about how advanced the technology is, but whether it can find a sustainable middle ground among regulation, users, and business.

Prediction markets give us a rare perspective: when the world is full of uncertainty, at least we know —

At this moment, how many people worldwide are willing to bet real money on “this event will happen.”

This consensus may not be correct, but it’s sufficiently real. And Polymarket’s fee introduction isn’t the end of the story, but the true beginning of its growth as a genuine service.