The Economic Calculation Behind Polymarket Leaving Polygon

Original | Odaily (@OdailyChina)

Author | Azuma (@azuma_eth)

On December 22, a development regarding the leading prediction market Polymarket drew widespread attention in the market — Polymarket team member Mustafa confirmed in the Discord community that Polymarket plans to migrate from Polygon and launch an Ethereum Layer2 network named POLY, which is currently the project's top priority.

An unsurprising “breakup”

Polymarket’s decision to leave Polygon is not surprising. One is a hot application-layer representative, the other a gradually declining old base layer; the market heat and value expectations between the two have long been mismatched. As Polymarket has grown into a new giant, Polygon’s insufficiently stable network performance (the most recent outage occurred on December 18) and relatively weak ecosystem have objectively become constraints for the former.

For Polymarket, building its own gateway means a win-win choice on both product and economic dimensions.

On the product side, besides seeking a more stable operating environment, building its own Layer2 network allows Polymarket to customize underlying features in reverse according to its platform needs, thus more flexibly adapting to future upgrades and iterations.

More importantly, the significance lies in the economic dimension. Building its own network means Polymarket can consolidate the economic activities and peripheral services generated around its platform into its own system, preventing the related value from leaking to external networks and instead gradually accumulating as its own systemic advantage.

Explicit and implicit economic contributions

As an application layer, Polymarket’s explosive popularity once brought Polygon considerable direct economic contributions. Data compiled by data analysts on Dune shows:

• Polymarket’s monthly active users are 419,309, with a total historical user count of 1,766,193;
• The total number of transactions this month is 19.63 million, with a historical total of 115 million transactions;
• This month’s total trading volume is $1.538 billion, with a historical total trading volume of $14.3 billion.

As for how to assess Polymarket’s contribution to the Polygon ecosystem economy, Odaily found an interesting ratio when compiling data for both.

• First, in terms of locked funds, data shows that Polymarket’s current total platform positions are about $326 million, accounting for about a quarter of Polygon’s total network TVL of $1.19 billion.
• Next, regarding gas consumption, statistics from last October indicated that transactions related to Polymarket consumed about 25% of Polygon’s total network gas;
• Considering that this data is somewhat dated, we checked recent changes. Data analysts on Dune show that in November, Polymarket-related transactions consumed about $216,000 in gas, while statistics show that Polygon’s total network gas consumption that month was about $939,000, again close to a quarter (about 23%).

Of course, there may be coincidences due to statistical methods and time windows, but similar results across dimensions can to some extent serve as a reference for estimating Polymarket’s economic significance to Polygon.

In addition to quantifiable indicators such as active users, locked funds, transaction volume, and gas contributions, Polymarket’s economic significance to Polygon is also reflected in a series of more difficult-to-measure but equally real implicit contributions.

First is the revitalization of stablecoin liquidity. All Polymarket transactions are settled in USDC, and its high-frequency, continuous trading behavior has objectively and significantly increased the demand for USDC circulation and usage scenarios on the Polygon network; second is the value of retained users’ ancillary behaviors, aside from the prediction market itself, these users may also, for convenience, turn to using other products such as DeFi within the Polygon ecosystem, thereby enhancing the overall ecosystem value of the Polygon network. These contributions are difficult to quantify with specific data, yet they constitute the “real demand” most valued and most scarce for base layer networks.

Why now? The answer is not hard to guess

In fact, judging solely from user scale, data performance, and market presence, Polymarket is fully capable of standing on its own. This is no longer a question of “should we leave,” but rather “when to leave.”

The reason for choosing this moment to start the migration is that the core reason may be the upcoming Polymarket TGE. On one hand, once Polymarket issues its token, its governance structure, incentive system, and economic model will become relatively fixed, and the cost and complexity of migrating the underlying infrastructure later will increase significantly; on the other hand, upgrading from a “single application” to a “full-stack system of application + base layer” itself means a change in valuation logic, and building its own Layer2 undoubtedly opens a higher ceiling for Polymarket in terms of narrative and capital.

In summary, Polymarket’s departure from Polygon is essentially not just a simple migration of the underlying infrastructure, but a microcosm of the structural changes in the crypto industry. When top applications begin to independently carry users, traffic, and economic activity, if the base layer cannot provide additional value, it will inevitably be “backstabbed.”

Nothing more than the pursuit of profit.