Polymarket has started rolling out Protocol V2, a ground-up redesign of the smart contracts that power its prediction markets. The upgrade began with limited production testing on October 5 and aims to simplify market creation, reduce operational friction and prepare the platform for future expansion.

Rajath Alex, Polymarket’s head of protocol, announced the deployment. The platform is running canary markets on the new system through October 30. A tentative target of November 2 has been set for switching newly created markets to Protocol V2. Existing markets and positions will remain on the prior infrastructure.

From 2019 Framework to Unified Architecture

Polymarket’s previous system relied on the Gnosis Conditional Tokens Framework first released in 2019. As the platform added new market formats over the years, it layered on separate adapter contracts for features such as negative-risk markets and collateral handling. Each addition increased integration complexity and required fresh approvals.

Protocol V2 replaces that stacked structure with a single ERC-1155 PositionManager contract. Position identifiers now encode the market module, condition and outcome in one place. A single exchange contract and router handle splits, merges and redemptions across all supported market types. The initial modules cover binary markets, atomic negative-risk markets, incremental negative-risk markets and combinatorial markets.

The contracts are upgradeable through a secure governance process, allowing future changes without repeated full redeployments.

pUSD as Sole Collateral and Modular Oracles

Protocol V2 uses Polymarket USD, or pUSD, as its only collateral token. pUSD is an ERC-20 token that wraps USDC and USDC.e at a one-to-one ratio through an external vault. The token was first introduced during an earlier exchange upgrade in April 2026. Under the new protocol it becomes the common collateral layer for all V2 markets.

Resolution logic has also been redesigned. An OracleAggregator sits above pluggable reporter, dispute and arbitration modules. Current integrations include UMA’s optimistic oracle for event-based markets and Chainlink for price-based resolution. Different sources can be combined under market-specific thresholds. The design keeps outcome determination flexible without locking the platform to a single oracle provider.

Migration Path and Developer Timeline

Existing Conditional Tokens Framework markets, positions and balances are not converted to V2. The new system operates as a separate ledger. App and website users face no technical migration steps, though they may need to approve new contracts when they first trade on V2 markets. Developers and market makers must maintain support for both systems during the transition.

A parallel deadline applies to data services. Data API version 1 retires on October 24. Integrations must move to the Rust-based Data API version 2 by that date. The canary period for Protocol V2 runs through October 30, giving builders roughly four weeks of live testing that includes weekly office hours.

Security Reviews and Future Cross-Chain Support

The V2 contracts underwent multiple independent audits by firms including Cantina, Quantstamp, Zellic, Sigma Prime and the Pashov Audit Group. Certora performed formal verification on core components such as the Exchange, Collateral Token, Position Manager, market modules and OracleAggregator. Polymarket continues to offer bug bounty rewards of up to $5 million for critical vulnerabilities.

The new architecture includes technical support for transferring positions, collateral and market outcome data between blockchains. Documentation references a transport layer that can use Chainlink’s Cross-Chain Interoperability Protocol, with Polygon remaining the current resolution hub. No specific timeline or additional networks have been announced for multi-chain activation.

Polymarket currently operates its prediction markets on Polygon, where pUSD is also issued. The Protocol V2 redesign removes the need for new adapter contracts each time market mechanics evolve and creates a cleaner foundation for both institutional market makers and future product features such as scalar resolution and directional collateral return, which remain under development.