PolyTerminal
Two products, one collateral
Polymarket's prediction markets use pUSD (Polymarket USD) as collateral, and Perps accounts are funded with pUSD as well. The two products sit side by side on Polymarket, but they are separate: a Perps account is its own account, funded by its own deposit, and the rules of one do not carry over to the other. Polymarket's documentation puts the main difference in one line: for Perps, there is no event resolution and no $0 or $1 settlement.
What you hold
In a prediction market you hold shares of an outcome, usually Yes or No. Each share is priced between $0.00 and $1.00, and the price is read as the market's estimate of the probability that the outcome happens. When the event is decided, a winning share is redeemable for $1.00 and a losing share is worth nothing.
In Perps you hold a position: long or short exposure to the price of an asset such as bitcoin, the S&P 500 or gold. A position has a size, an entry price, a margin and a leverage setting, and its value changes with the price all the time. There is no event and nothing to redeem. You close the position when you choose to, or the exchange does it for you.
How you win and lose
| What you compare | Prediction market share | Perps position |
|---|---|---|
| What moves your result | The outcome of an event, and the share price until then | The price of the asset while you hold |
| Best case | The share pays out in full | A gain that grows with every move of the price in your direction |
| Worst case | The share ends at zero, and you lose what you paid for it | You lose the margin behind the position, and the exchange closes it when equity is too low |
| Time | Until the event is decided, or until you sell | Open-ended: until you close it or it is closed |
| Exit before the end | Sell the share at its current price | Close the position at its current price |
A share you buy is paid for in full, so the price you paid is the most you can lose on it. A Perps position works the other way round: leverage lets you hold more position than the margin you post, which magnifies gains and losses and makes liquidation possible.
Leverage, margin and liquidation exist only in Perps
Leverage is the ratio between the position and the margin behind it. The initial margin is Notional / Leverage, and the exchange closes a position when equity falls below maintenance margin. Nothing like this exists for a share you bought with cash, which is why the Perps guide and the liquidation guide are worth reading before your first leveraged trade, however comfortable you are with prediction markets.
Time works differently
A prediction market has a built-in end: the event is decided and the share settles, a process explained in the guide to how Polymarket works. A perp has no settlement date. To keep its price close to the asset's price without a settlement date, it uses funding, a payment between longs and shorts that settles every 1 hour. Holding a Perps position has a running cost or gain that a prediction market share does not have.
Prices mean different things
The price of a prediction market share is itself a probability: at 65 cents the market says about 65 percent. The odds converter turns it into other formats. The price of a perp tracks the price of the asset, and its risk is measured at the mark price, a median of three signals, not at the last trade. The two prices are not comparable, and a move that is small in one product can be large in the other.
What you pay
Prediction markets charge a fee to the taker only, using the formula fee = C × feeRate × p × (1 - p), with a rate that depends on the category of the market, as described in the fee guide. Perps charge a fee on each fill as abs(Price * Quantity) * Rate, in tiers that follow your trailing 30-day trading volume, starting at 0.0400% for takers and 0.0125% for makers. Perps also have funding, and a liquidation fee if you are liquidated.
Where the risk sits
| Risk | Prediction markets | Perps |
|---|---|---|
| Wrong view on the event or the price | Yes, up to the price paid | Yes, magnified by leverage |
| Ambiguous rules or a disputed resolution | Yes: the rules decide the result | Not applicable: there is no event to resolve |
| Forced closing | No | Yes: liquidation |
| Running costs while you hold | No | Yes: funding |
| Thin books and wide spreads | Yes | Yes |
| Restrictions on who can trade | Check the rules for your place | Orders cannot be placed from the United States, Canada, Cuba, Iran, North Korea, Syria, Crimea, Donetsk and Luhansk |
Choosing between them is not this site's job
Both products carry a high risk of loss, and neither is suitable for everyone. This page explains how they differ so that you know what you are choosing. It does not say which to use. Read the risk disclosure and trade only with money you can afford to lose.
FAQ
Can a Perps position be liquidated like a prediction market share?
No. A prediction market share is paid for in full and cannot be liquidated; it ends at its payout or at zero. A Perps position is leveraged, so the exchange closes it when your equity falls below the maintenance margin. Liquidation exists only in Perps.
Do Perps settle at 1 or 0 like prediction markets?
No. Perps have no event and no settlement at 1 or 0. A perp follows the price of an asset with no end date, and funding payments keep its price close to the asset's. You close the position yourself. The exchange can also close or reduce it by liquidation or auto-deleveraging, and a market that Polymarket retires closes its positions at a final settlement price.
Can I use the same balance for both?
Not automatically. A Perps account is funded by its own deposit of pUSD, and prediction markets use pUSD held in your Polymarket wallet. Both use the same collateral token, but the balances and positions are kept separately, so check which balance an order will use.
Which is riskier?
Neither is safe, and the answer depends on how you use them. Leverage in Perps magnifies losses and can close a position by force. Prediction market shares can end at zero, and unclear rules can change the result. Read how each one fails before you trade.
Sources and checks
Every rule quoted in this article comes from the registry below. Each row names the official page and the day it was compared with the text.
All 14 rules used in this article
| Rule | Value | Official source | Checked |
|---|---|---|---|
| Collateral of prediction markets | pUSD (Polymarket USD) | docs.polymarket.com/ | |
| Perps collateral | pUSD | docs.polymarket.com/ | |
| How Perps differ from prediction markets | there is no event resolution and no $0 or $1 settlement | docs.polymarket.com/ | |
| Range of a share price | between $0.00 and $1.00 | docs.polymarket.com/ | |
| What a winning share redeems for | $1.00 | docs.polymarket.com/ | |
| Initial margin | Notional / Leverage | docs.polymarket.com/ | |
| Liquidation starts when | equity falls below maintenance margin | docs.polymarket.com/ | |
| Funding charge window | 1 hour | docs.polymarket.com/ | |
| Taker fee formula | fee = C × feeRate × p × (1 - p) | docs.polymarket.com/ | |
| Perps fee per fill | abs(Price * Quantity) * Rate | docs.polymarket.com/ | |
| What sets the Perps fee tier | trailing 30-day trading volume | docs.polymarket.com/ | |
| Taker fee at the lowest tier | 0.0400% | docs.polymarket.com/ | |
| Maker fee at the lowest tier | 0.0125% | docs.polymarket.com/ | |
| Countries where Perps orders cannot be placed | the United States, Canada, Cuba, Iran, North Korea, Syria, Crimea, Donetsk and Luhansk | docs.polymarket.com/ |
Keep reading
Perps · 10 min
Polymarket Perps: How They Work
How Polymarket Perps work: perpetual futures with no expiry, margin, funding, mark price and liquidation, with the official rules and dates.
Basics · 8 min
Polymarket Fees Explained
Polymarket prediction market fees explained: the taker fee formula, rates by category, why fees peak at 50 cents, maker rebates, builder fees and 2026 changes.
Perps · 8 min
Polymarket Perps Liquidation Explained
How liquidation works on Polymarket Perps: the trigger, the insurance fund, auto-deleveraging, the extra fee and how to read your distance to liquidation.
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PolyTerminal is an independent interface for Polymarket and is not operated or endorsed by Polymarket. Orders placed through PolyTerminal carry PolyTerminal’s Polymarket builder code, and PolyTerminal may charge a builder fee on top of Polymarket’s own fees. This page is educational and is not investment advice. Rules were compared with the official documentation on Oct 19, 2026; check the source before you act on a number.