$112 million breakthrough: Polymarket returns to the U.S. by merging with QCX

"Polymarket is finally coming home," said Shayne Coplan, the founder of Polymarket and an American, who couldn't hide his excitement and expressed his feelings multiple times on social media.

If there is any project that has come out of the crypto space during this cycle that has disrupted and changed traditional forms, and has not issued a token yet, Polymarket definitely stands out as the most significant one. This prediction platform that influenced the U.S. elections recently acquired the small derivatives trading platform QCX for $112 million. With QCX's "license," Polymarket can finally legally reopen services for U.S. users.

Polymarket founder Shayne Coplan is very excited about officially returning to the US market.

Looking back over the past three years, Polymarket's journey in the United States has not been smooth. In 2022, due to not obtaining a derivatives compliance license, Polymarket was sued by the CFTC and fined $1.4 million, and was forced to "commit" to withdrawing from the U.S. market and blocking U.S. users.

The 2024 U.S. election is also the year when Polymarket rose to prominence, becoming a media darling for its accurate predictions of Trump's victory and explosive trading volume, establishing itself as the "on-chain public opinion." However, this has made the platform a focus of investigation by the U.S. Department of Justice (DOJ) and the CFTC once again, with even its founder Shayne Coplan's apartment in New York City being raided by federal authorities, who seized all of his laptops. Although no charges were ultimately filed, this regulatory pressure put Polymarket on the "edge of survival."

By 2025, the situation will take a turn for the better. With the Trump administration taking office, the cryptocurrency industry receives a strong signal of policy loosening. The U.S. Department of Justice and the CFTC successively announced the formal end of all investigations into Polymarket, paving the way for its return to the United States.

Polymarket founder Shayne Coplan got his phone back.

Instead of slowly building a compliance application and waiting for three to five years for approval, it's better to "directly buy a ready-made one," which is the most common compliance "shell" method in the cryptocurrency industry.

There is not much publicly available information about QCX online, and it is relatively unknown. From the limited information available, it can be found that this small derivatives trading platform applied for dual licenses of DCM (Designated Contract Market) and DCO (Clearing Organization) starting from 2022, and was officially approved only on July 9, 2025. This compliance shell can be regarded as a "scarce resource" in the U.S. digital asset industry — only platforms that possess DCM/DCO licenses can truly open channels for dollar deposits, settlements, and legal predictive contract trading for domestic traders, brokers, and large capital users.

Polymarket has invested $112 million to complete the acquisition, which is almost the ultimate demonstration of "buying time with money." Compared to the uncertainty of years of self-building and regulatory games, this move directly opens the door to the mainstream market in the United States, allowing the platform to potentially transform overnight from an "illegal gray industry" to a "compliant giant in the US."

According to Similarweb data, 25% of visitors to the Polymarket website come from the United States, followed by the next four countries with the most visits: Canada 6.3%, Netherlands 6%, Vietnam 5.9%, and Mexico 5%. Before the CFTC settlement, the U.S. market share was between 34% and 54%. Although Polymarket prohibits U.S. users from participating, in reality, market demand has always been there, just in a more "underground" manner. For example, users can still access Polymarket through virtual networks, and another workaround is to use a Polymarket-based Telegram bot, which also allows them to bypass KYC.

After purchasing QCX, Polymarket quickly topped the front row of app stores, and the community's enthusiasm soared, seemingly indicating that another round of explosion in decentralized prediction markets is about to come.

The "Suit Incident" is not over, how does Polymarket plan to change its "algorithm"?

Unlike traditional centralized prediction platforms, Polymarket adopts a decentralized settlement method. Although there have been significant improvements in innovation and efficiency, this settlement method also reveals some drawbacks, especially after this month's "suit" incident involving Ukrainian President Zelensky on Polymarket.

"Will Zelensky appear in a suit before July?" This prediction became popular because Zelensky usually wears camouflage military uniforms, and wearing a suit would be seen as a significant event. After the actual meeting concluded, the question of whether Zelensky wore a "suit" that day surprisingly sparked a huge controversy.

Why? Because Zelensky was wearing a dark jacket with a shirt and tie that looked very "formal", but did not fully conform to the traditional definition of a suit, and media reports varied: some said he was wearing a suit, while others disagreed. As a result, users on Polymarket betting on "will wear a suit" and "won't wear a suit" each sought evidence, news, and engaged in heated debates on social media. Since the settlement of these markets relies on UMA optimistic oracle (i.e., community proposals + voting decisions), the final market outcome is determined by the voting results of a group of UMA token holders.

However, the voting process of this incident erupted into serious disagreements — most ordinary participants believed that "Zelensky was not wearing a traditional suit," but due to the highly concentrated voting power of UMA, whale accounts (large holders) held the vast majority of voting rights. They collectively voted to conclude that "yes, Zelensky was wearing a suit." This caused an uproar among users betting on "not wearing," who questioned the fairness of this ruling, and some even accused of voting manipulation or "bribery".

UMA's official statement acknowledges that this type of highly subjective on-chain prediction requires a higher-dimensional security and diverse adjudication mechanism. Relying solely on token voting and a simple Schelling Point can indeed be easily influenced by capital forces. As for how to make the prediction market decisions fairer and more effective, the Polymarket team also seems to be continuously pushing for upgrades.

Currently, Polymarket is offering an annualized reward of 4% for positions on the 2028 U.S. elections, and it is expected to launch new rewards and oracle solution systems later this year.

According to the announcement made by UMA earlier this year titled "UMA and Polymarket are building the next generation of prediction market oracles using EigenLayer," we can see that UMA, Polymarket, and EigenLayer are exploring further methods to recognize bribery as intersubjective truth. This will enable the next generation of oracles to handle more subjective prediction market parsing tasks, while also benefiting from the additional intersubjective security provided by EigenLayer and the EIGEN token, thereby preventing bribery.

UMA Oracle (Optimistic Oracle) is currently one of the few solutions in the industry capable of handling complex issues and disputes. Its mechanism is as follows: first, someone (or AI) provides an answer, and then it is opened for voting by the community and holders of UMA tokens. If someone raises a question, they can file an objection, which will enter arbitration.

The arbitration process will use a "Schelling Point" theory, allowing voters to spontaneously choose the answer that is most likely to be the one that "the majority believes is correct" in order to maximize their own interests. UMA's "optimistic oracle" has a significant advantage in efficiency, but the drawbacks of "bribery attacks" are also very evident, such as large holders secretly buying off voters to create false judgments together. This has also been a point of criticism for Polymarket for a long time.

From the article, we can see several directions:

First is Dynamic Bonding and Variable Challenge Periods. As the name suggests, this means that a one-size-fits-all deposit amount and dispute handling standards are no longer set for all markets, but rather adjusted flexibly according to the actual activity level, risk, and betting amount of each market. For example, in markets with significant disputes, impact, and high betting amounts, such as "Election Results," ample time is given for everyone to investigate and appeal. Higher deposits and longer arbitration periods are implemented to prevent malicious operations. In contrast, for smaller markets like "Will it rain tomorrow" or for something like "Bitcoin's price," the deposits and arbitration times can be lower, leading to higher efficiency, with cycles that can be compressed or even automatically settled.

Not only that, with the development of AI technology, Polymarket is also actively trying to involve AI robots in the decision-making process. AI can quickly and automatically gather diverse information from mainstream media, news, images, etc., make preliminary judgments on factual results, or assist in organizing evidence, helping community members reduce a lot of repetitive verification work. At the same time, AI can also monitor potential abnormal voting behaviors or data fluctuations, issuing early warnings to assist humans in making more rational and scientific judgments. Although AI does not currently directly determine market outcomes, its "assisted adjudication" capability is quietly changing the decision-making process, pushing the entire prediction market towards a more efficient and intelligent evolution.

Preventing large holders from bribing and manipulating results is another tricky issue in decentralized governance. In the past, if whale players colluded to buy votes, it was entirely possible to hijack market fairness. To address this, Polymarket introduced the "re-staking" mechanism of EigenLayer, a new Ethereum ecosystem project. Simply put, any voter who wants to participate in the resolution must put up mainstream assets such as ETH as a deposit and agree that if they are found to have committed wrongdoing or colluded to cheat, these deposits will be directly confiscated. This high economic cost significantly raises the threshold for cheating, making it extremely costly for attackers to launch a manipulation, while ordinary users gain an additional sense of security and trust. EigenLayer is also researching so-called "subjective security", which means that through multi-dimensional community participation and diverse deposit assets, even highly controversial or subjective market issues can better converge on a greatest common divisor-style "on-chain truth."

In short, it is difficult to manipulate the entire prediction outcome by holding only one type of token, UMA. In the future, Polymarket may introduce other cryptocurrencies like ETH that are harder for large holders to control as synthetic assets. Many netizens speculate that there may be a community token of Polymarket itself.

This also raises discussions about Polymarket's next capital route: issuing tokens or going for an IPO?

Is issuing tokens a better way out?

"Why not just issue tokens for incentives?" This perspective is quite typical; some people feel that going through synthetic assets, oracle profit sharing, and then staking ultimately leads back to the most direct "issue tokens - airdrop - incentives." Why not lay it all out from the start? However, from the perspective of governance and security, there are still many who value the new mechanism. For example, by designing mechanisms to disperse the influence of single large holders, allowing the platform's native token and external tokens (like UMA, ETH) to participate in decision-making collateral, and embedding a multi-token structure into the underlying rules, we can strive to ensure that every market and every participant feels a sense of belonging and voice. This approach not only provides redundancy in terms of security but also guarantees community vitality.

If Polymarket really chooses to issue a token, the changes brought about will not only be at the economic level. First of all, the mechanism itself is much more flexible than single-chain governance, supporting different markets to vote and arbitrate with different currencies. The community can adjust voting weights and thresholds, turning the diversity in the Web3 scenario into an advantage. Secondly, issuing a token can directly drive community consensus, stimulate more real users to be active, contribute content, and participate in governance, bringing together DAO and "on-chain gamified operations" to form a self-reinforcing positive feedback loop. The benefits of the capital market will naturally be included, as users, LPs, market makers, and developers will all be willing to hold tokens to participate, driving liquidity to grow larger, and the ecosystem to become more robust.

The more important point is that after the token issuance, Polymarket can seamlessly integrate with infrastructure such as DeFi, liquidity pools, and cross-chain protocols, easily embedding various new gameplay of Web3 native finance, such as staking, lending, synthetic assets, and even multi-chain governance. This means that "on-chain is a global market," and there is no longer a need to worry about the securities laws of any country being a bottleneck. Community autonomy, distributed governance, and financial innovation can run concurrently. More flexible incentive and profit-sharing models can also directly return platform profits to token holders, which can stimulate governance enthusiasm and attract long-term capital for the protocol.

But looking at it from another angle, if Polymarket goes the IPO route, the benefits are actually significant. The biggest advantage is naturally legality and compliance, which can earn a legitimate "pass" to major financial markets like the US and Europe, attracting mainstream institutions and large capital to enter, with increased endorsement and credit ratings. Collaborating with banks, brokerages, and leading trading platforms will no longer be restricted by identity, and it could even directly enter the main battlefield of traditional finance's traffic. The financing stability brought by the IPO should not be underestimated; the money raised through the IPO doesn't have to worry about the volatility of token prices or market sentiment affecting the platform's survival. Additionally, the value of equity has always been relatively stable in the minds of mainstream investors, reducing the risk of bubbles compared to the crypto space.

The advantages in corporate governance for listed companies are also very prominent. The board of directors, accountability system, and professional executive team—these traditional "standard configurations" in the world of finance are all beneficial for long-term strategy, risk control, and team upgrades. Not to mention that tax policies and regulatory rules are clearer and more transparent, making it possible to expand globally while complying with regulations and guidelines, truly minimizing the risk of "black swan" events.

Of course, the cost of going public is equally clear. First is the significant decrease in innovation speed and mechanism flexibility. All product innovations, protocol upgrades, and incentive model adjustments by the company, even a minor change, must go through a lengthy legal and compliance process. Compared to on-chain DAO decision-making, the speed is significantly slower. Many new DeFi, DAO, and even on-chain governance and multi-currency voting plays can get stuck in compliance review just from the introduction, and the sensitivity to market reactions will gradually decrease. A more practical issue is that after going public, the sense of co-building between Polymarket and the Web3 community will be diluted. Under the traditional IPO model, users find it difficult to participate in protocol profit sharing and daily governance like they do by holding tokens, which can also weaken community vitality and self-organization motivation. For emerging community users who prefer a fast-paced, highly interactive, and co-creative atmosphere on-chain, "traditional IPO" is not very appealing, and the market penetration speed may not be faster than that of purely Web3 projects.

However, we can also imagine that after the crypto space gradually becomes a mainstream part of the financial market, a dual hybrid route like Token+IPO might also be realized on Polymarket.