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Polymarket tests Protocol V2 with one positions contract

Polymarket has started live canary markets for Protocol V2, a rebuild that brings positions and pUSD collateral into a new system ahead of a planned November switch.

Onchain Report Newsroom#e12bbd2 min read

Polymarket tests Protocol V2 with one positions contract

Polymarket has started testing Protocol V2 on live markets, beginning a rebuild of the contracts that handle market positions and trades. The upgrade brings positions into one contract and uses pUSD as collateral, as The Block reported from an announcement by protocol lead Rajath Alex.

What changes in Protocol V2?

V2 replaces Polymarket’s older Conditional Tokens Framework for new markets. It puts positions in a single ERC-1155 contract, a token standard that can handle different types of tokens in one contract. The system also uses pUSD as collateral, with one exchange for each market type and a router to connect the parts.

The first version supports four types of markets: Binary, Atomic Neg-risk, Incremental Neg-risk and Combinatorial. An OracleAggregator will connect to data sources such as UMA and Chainlink to help determine outcomes, according to Alex’s announcement as reported by The Block.

When will new markets move to V2?

Polymarket is running the canary markets through October 30. A move of new markets to V2 is tentatively planned for November 2, The Block reported. That date is a target, not a confirmed final switch date.

The rebuild also lays groundwork for moving positions, collateral and market resolutions between blockchains. Polymarket has not said when it will activate those features. Its Protocol V2 migration guide says existing holdings in the older Conditional Tokens system will not be converted. App and website users do not need to carry out a technical migration, though they may see approval prompts.

What does the change mean for traders?

For now, V2 is being tested on a limited set of live markets while existing positions remain on the current system. Once new markets move over, traders will encounter the new contract setup when taking positions in those markets. The shift to one positions contract and pUSD aims to reduce the extra contract layers added as Polymarket expanded to support more market types.

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