Polymarket Launches V2 with ERC-1155 and pUSD Collateral
Polymarket has launched its V2 upgrade, replacing its Gnosis-based system with a single ERC-1155 positions contract and pUSD as collateral. This change aims to streamline trading and reduce gas fees for users.
Key takeaways
- Polymarket's V2 upgrade introduces a single ERC-1155 positions contract.
- pUSD replaces USDC as the primary collateral on Polymarket.
- The upgrade aims to reduce gas fees for traders.
- Polymarket faces a New York lawsuit and EU regulatory questions.
Polymarket has rolled out its V2 upgrade, replacing its legacy Gnosis-based setup with a single ERC-1155 positions contract and pUSD as collateral. The overhaul aims to reduce gas fees and simplify the trading experience on the prediction market platform.
What's New in V2
The V2 upgrade consolidates all positions into a single ERC-1155 contract, eliminating the need for multiple token contracts per market. This architectural change is expected to lower gas fees for traders. Additionally, pUSD — a dollar-pegged stablecoin native to the platform — replaces USDC as the primary collateral, giving Polymarket direct control over the settlement asset.
Why the Timing Matters
The upgrade arrives as Polymarket faces mounting regulatory pressure. New York Attorney General Letitia James sued the platform in late September, calling it an illegal gambling operation. The European Securities and Markets Authority (ESMA) also recently questioned whether Polymarket lacks proper authorization to operate in the EU. By moving to pUSD and a self-contained contract system, Polymarket reduces reliance on external stablecoin issuers and third-party infrastructure, potentially insulating itself from some regulatory vectors.
What It Means for Traders
For traders, the V2 upgrade means lower gas fees and a more streamlined experience. The single ERC-1155 contract simplifies position management, reducing the complexity of holding multiple tokens across different markets. However, the switch to pUSD means traders must now use a less widely adopted stablecoin rather than USDC, which could introduce liquidity friction for those moving funds between Polymarket and other platforms.
Frequently asked questions
What is the main change in Polymarket's V2 upgrade?
The main change is replacing the Gnosis-based system with a single ERC-1155 positions contract and pUSD as collateral, replacing USDC.
How does the V2 upgrade benefit traders?
The V2 upgrade reduces gas fees by consolidating all positions into one contract and simplifies position management.
Why is pUSD being used as collateral in the V2 upgrade?
pUSD gives Polymarket direct control over the settlement asset, reducing reliance on external stablecoin issuers like Circle.
What regulatory challenges is Polymarket facing?
New York Attorney General Letitia James sued Polymarket in late September, and ESMA questioned its EU authorization in September 2026.