Breaking: Polymarket to Launch Crypto Collateral Token Backed by Circle’s USDC

Prediction markets Polymarket has unveiled plans to launch its crypto collateral token, the ‘Polymarket USD’, which will serve as the settlement token for all contracts. The Polymarket collateral token will be backed by Circle’s USDC and forms part of a major upgrade by the prediction platform.

Polymarket Collateral Token To Launch Within The Next Three Weeks

In an X post, Polymarket revealed that it is migrating from USDC.e to a new collateral token, Polymarket USD, which will be backed 1:1 by Circle’s USDC. The prediction markets stated that this migration will happen over the next two to three weeks.

“For most users, this transition is seamless. The frontend handles wrapping automatically with a one-time approval prompt,” the prediction markets platform said. It added that Power users and API-only traders will need to wrap their USDC or USDC.e into the Polymarket collateral token via the Collateral Onramp contract’s wrap() function.

This move comes as part of a “full exchange upgrade,” even as prediction markets continue to gain traction. Polymarket described this move as their “Our biggest infrastructure change since launch… faster execution, lower gas, & a cleaner foundation going forward.”

Meanwhile, the Polymarket collateral token launch also comes as prediction markets continue to face crackdown from state regulators over claims that these platforms are operating unlicensed sports betting platforms. In defense of these prediction markets, the CFTC recently sued four U.S. states, reiterating its ‘exclusive jurisdiction’ over prediction markets.

New Contracts and Order Books

In addition to the launch of the Polymarket collateral token, the prediction market is also launching new contracts and order books. The platform unveiled the CTF Exchange V2, an upgrade to the existing Exchange contract.

Furthermore, the top prediction market platform noted that this new contract optimizes and simplifies the Order structure, optimizes order matching, includes builder codes for on-chain order attribution, and optimizes fee collection and distribution. The V2 will also support EIP-1271, enabling secure authentication for smart contract wallets.

Meanwhile, the new order book automatically handles the switch from version 1 to version 2. However, the platform noted that builders will need to be on the latest version of each client for this auto-migration to work.

This major upgrade and the launch of the Polymarket collateral token have again led to speculations that the prediction market could launch its native token at some point. It is worth noting that Polymarket filed U.S. trademarks for POLY and $POLY in February earlier this year. The trademark covers crypto trading and token services, signaling plans to launch the ‘POLY’ token at some point.