Polymarket is a blockchain-based prediction market that allows users to wager on a variety of outcomes, including politics, sports, and current events. Users purchase shares in outcomes, and the prices represent the likelihood of certain events occurring.If a user's forecast is correct, they earn rewards based on the market price at settlement; otherwise, they lose their investment.

How It Works

1. Binary Trading: Users wager on outcomes (e.g., "Will Candidate A win?") by purchasing shares in either the "Yes" or "No" options. The price of these shares reflects the market's anticipated likelihood of the outcome occurring.

2. Order Book: Polymarket's order book is unified, with limit orders for both outcomes presented. This structure maintains liquidity and allows users to view live buy/sell orders.

3. Automated Market Maker: Polymarket prices the premiums for each binary option contract using an automated "Automated Market Maker" (AMM) that considers the relative demand for each position. The AMM rebalances contract prices after every transaction.

What it offers

1. Liquidity prizes Program: Users can receive prizes for placing limit orders near the market's average price (midpoint). The more competitive and close the orders are, the greater the potential benefits.

2. Market Making: Participants that supply liquidity by posting limit orders are immediately eligible for prizes, which are determined daily based on their contribution to market stability.

Winning and Losing

1. Payouts: If a user's prediction is true, they will be paid according to the market price at settlement. Incorrect projections cause a loss of the initial investment.

2. Daily Earnings: Users can track their earnings from liquidity awards that are given out in USDC around midnight UTC.