Polymarket has announced the launch of a new referral program that allows high-volume traders to earn commissions on new users.
The company said existing users who have traded at least $10,000 in volume are eligible to sign up. Users will then be paid a percentage of the fees from every referral that signs up to the platform.
A statement on the platform’s website said users can earn a percentage of the fees generated by every referral that signs up. For the first 180 days, direct referrals will earn 30% of the fees, while indirect referrals will earn 10%.
“Direct referrals are those you personally refer, and indirect referrals are those referred by someone you’ve referred (i.e., if you refer Alice and Alice refers Bob, you’ll earn 10% of trading fees generated from Bob’s trading volume as well),” noted the company.
It said these rates are temporary and may change without notice.
Fees Limited To Crypto Markets
Until recently, Polymarket has not charged fees on markets. It has adopted a growth-first model, effectively offering its services for free as it builds a user base.
Founder Shayne Coplan previously said, “At no point are we intermediating anything, or custodying anything, or even taking fees — it’s basically nonprofit. What we really focus on is the information.”
Unlike traditional betting platforms, most prediction market companies generate revenue by charging fees when users participate in their markets.
Kalshi, for example, charges a variable rate of between 0.7% and 3.5%.
Polymarket currently only charges fees on 15-minute crypto markets. It says these fees are then distributed among market makers as rebates to incentivize deeper liquidity and tighter spreads.
The fee rates change depending on the trading price. The maximum effective fee rate is 1.56% at 50% probability. Fees then decrease symmetrically when prices are higher or lower. Kalshi has a similar model with fees highest when the price is in the centre.
Low Revenue, High Value
It is unclear if the company plans to add fees to more markets in the future. Despite not charging users or generating revenue, Polymarket is highly valued.
Last year, Peter Thiel’s Founders Fund invested $200 million in the company for a 20% stake, valuing it at $1 billion.
Intercontinental Exchange (ICE) then invested $2 billion in October, bringing the company’s valuation to $9 billion. In January, this grew to $11.5 billion, and Polymarket is reportedly seeking further investment at a valuation of $12 to $15 billion.
A series of high-profile partnerships has raised the company’s profile. It recently partnered with BLAST to expand its presence in esports and has also signed deals with other sports leagues, including the MLS, NHL, and MLB.
At the same time, it is facing increasing legal scrutiny, particularly now that it is licensed in the US. It has already been forced to block access in Nevada, and several other states have filed lawsuits against the company.
Until now, Coplan has refused to alter his business model, but the start of fees and a referral program are signs that the company may change in the near future.