Polymarket Major Upgrade: Phasing Out USDC.e, Launching Native Collateral Tokens

Polymarket, a prediction market platform, announced that it will fully rebuild its trading infrastructure within the coming weeks. The core changes include launching a new collateral token called “Polymarket USD,” backed 1:1 by USDC, replacing the existing bridged stablecoin USDC.e, while also introducing a “Version 2” upgrade contract and a brand-new order book system.

Polymarket USD: Design logic for a native collateral token

Polymarket’s existing settlement architecture relies on USDC.e as a collateral token; this upgrade will fully shift to the native-issued “Polymarket USD.” The new token is backed 1:1 by USDC, giving the platform more direct control over the settlement layer, while removing structural dependence on bridged assets.

This upgrade also introduces support for EIP-1271 (the Ethereum smart contract wallet signature standard), allowing multi-signature wallets and automated trading systems to interact directly with the platform, extending compatibility beyond traditional wallets to institutional and programmatic trading scenarios.

Impact of the upgrade on different types of users

General users: Complete a one-time authorization through the platform interface; the conversion process executes automatically, with no manual steps required

Advanced users and bot traders: Need to manually convert funds; automated migration is not supported

Order book status: All existing orders will be cleared during maintenance; trading will be temporarily paused

Timeline: Polymarket says it will announce the specific maintenance window in advance; the exact dates have not yet been disclosed

Regulatory background: CFTC-approved-driven compliance transition

This infrastructure rebuild is not simply a technical optimization; it directly corresponds to Polymarket’s regulatory compliance process. In November last year, Polymarket received approval from the U.S. Commodity Futures Trading Commission (CFTC), obtaining a license to operate an intermediary trading platform in the United States. This clears the way for its formal return after previously exiting the U.S. market due to regulatory issues.

The platform said this system upgrade is intended to strengthen controls over risks of market manipulation and insider trading, making the infrastructure better align with the technical standards required by U.S. regulatory authorities for trading platforms. After approval, Polymarket plans to expand business directly to U.S. brokers and clients, and to facilitate trading through regulated U.S. trading venues.

Of note, the Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, has completed a $600 million investment in Polymarket. This further strengthens market expectations that the platform is transitioning toward regulated, institutionalized trading venues, and also provides an important capital support backdrop for this technical upgrade.

Frequently Asked Questions

What are the main differences between Polymarket USD and USDC.e?

USDC.e is a bridged version of USDC generated through cross-chain bridging technology. The platform has limited direct control over its settlement layer, and it also carries technical and compliance risks specific to bridged assets. Polymarket USD is a collateral token issued natively by the platform, backed 1:1 by USDC. The platform can directly manage the settlement process and reduce reliance on third-party bridging mechanisms.

What steps do general users need to take after upgrading on Polymarket?

For most users, the upgrade process is completed automatically through the platform interface, requiring only a one-time authorization approval. Advanced users who connect via API or run automated trading bots must manually execute the funds conversion. Polymarket says it will provide detailed operation instructions before the upgrade.

Does this upgrade affect the settlement of results for existing prediction markets?

Existing prediction markets themselves are not affected. However, during the upgrade, all order books will be reset and trading will be temporarily paused. Polymarket says it will announce the specific maintenance time window in advance, and users can complete preparation steps such as converting funds before then.