In just 70 days, Polymarket easily collected tens of millions of dollars in fees

Original | Odaily Planet Daily (@OdailyChina)

Author | Azuma (@azuma_eth)

On January 6th this year, Polymarket officially ended its “zero transaction fee” model, starting to charge trading fees on the “15-minute cryptocurrency price movement” markets. The specific fee rate varies with real-time market odds — the closer the odds are to 0% or 100%, the lower the fee; conversely, the closer the odds are to 50%, the higher the fee, with a maximum of 1.56%.

Then, on January 28th, about three weeks after the fee implementation, we published an article titled “Data suggests Polymarket can easily earn over $100 million annually, assuming…” The article made a static estimate based on Polymarket’s trading volume and activity structure at that time: conservatively, if the fee markets remain unchanged, Polymarket could generate approximately $38 million annually; more aggressively, if fees are extended to all markets, the estimated annual fee income could reach $418 million.

During our previous revenue estimate for Polymarket, we struggled with a short observation period and limited sample size. Today, after nearly two months, we’ve used more comprehensive data to re-estimate Polymarket’s revenue prospects. The results show that the so-called “conservative” estimate was indeed too cautious, and the “aggressive” scenario is not overly exaggerated.

Revenue Data Changes

According to data compiled by Gate Research on Dune, since the implementation of trading fees on January 6th, Polymarket has accumulated over $11.2 million in fee revenue.

Using the most conservative static estimate again, assuming trading volume and activity structure remain unchanged, Polymarket could earn about $58.4 million annually.

However, this estimate does not accurately reflect Polymarket’s revenue-generating capacity.

The reason is that Polymarket’s revenue data is visibly growing — over the past 10 weeks, the platform’s fee income has been: $560K, $786K, $633K, $749K, $1.08M, $1.28M, $1.35M, $1.29M, $1.63M, $1.84M — nearly every week showing clear growth.

Reasons for Revenue Growth

There are two main reasons for the increase in Polymarket’s fee income: first, Polymarket has expanded the scope of markets subject to fees; second, both overall trading volume and fee-market trading volume are continuously increasing.

Regarding market scope, Polymarket extended the fee mechanism to all cryptocurrency-related markets on March 6th. Earlier, it also trialed fee collection in sports markets such as NCAA and Serie A, but the primary source of fee income remains the cryptocurrency markets.

In terms of trading volume, data from Dune’s Data Dashboards shows that weekly overall trading volume and cryptocurrency market trading volume (the purple bars at the bottom) are both steadily rising.

Future Revenue Estimates

In our previous Polymarket revenue estimate, we manually calculated the proportion of “15-minute cryptocurrency price movement” markets relative to all crypto markets. Now, since Polymarket extended fees to all crypto markets on March 6th, the estimation process has become much easier. As for NCAA and Serie A, they are temporarily ignored because the former has not yet entered the “March Madness” tournament phase, and the latter does not attract much attention in American culture. The trading volumes of these markets are vastly smaller compared to cryptocurrencies.

Using data from the week of March 9-15, the only full week after the fee extension, cryptocurrency-related event trading volume accounted for 26.7% of Polymarket’s total platform trading volume. During that week, Polymarket’s fee income was approximately $1.84 million. Based on this static proportion, at current trading levels and structure, if Polymarket implemented similar fee models across all markets, it could generate an estimated annual revenue of $360 million.

The printing press is already running

Notably, as a key measure to expand liquidity, Polymarket has so far distributed a total of $13.41 million in subsidies to liquidity providers (LPs). If the data from the remaining days of March continue the performance of the first half of the month, the platform’s fee income this month could cover the total liquidity subsidies.

Polymarket has essentially demonstrated the revenue potential of the prediction market industry. Future growth will mainly depend on two variables — how much trading volume can still grow, and whether fees can be further extended to more markets.

If both variables continue upward, prediction markets could become the simplest and most direct “money-printing machine” in the cryptocurrency industry.