Polymarket Overhauls Smart Contracts with New Protocol V2 Rollout
Prediction market platform Polymarket has commenced the rollout of Protocol V2, a redesigned smart contract system aimed at supporting multiple market types through a unified exchange while paving the way for expansion beyond Polygon. The upgrade introduces pUSD as the sole collateral token, implements upgradeable smart contracts and a new OracleAggregator system, and is undergoing live market testing until late October ahead of an anticipated full transition in November.
Rebuilding Smart Contract Infrastructure
Polymarket announced the rollout of Protocol V2, a fully revamped smart contract system replacing the legacy codebase developed in 2019 that required multiple contracts to support new market types. The new protocol consolidates functionalities into a single exchange and standard contract components, streamlining the addition of diverse market formats.
Rajath Alex, Polymarket’s head of protocol, stated that the system is being tested on a limited number of live markets through October 30, with a target date of November 2 to switch all new markets to Protocol V2.
pUSD as Sole Collateral Token and USDC Peg
At the core of Protocol V2 is Polymarket USD (pUSD), which serves as the sole collateral token. Introduced in an exchange upgrade in April 2026, pUSD is backed 1:1 by Circle’s USDC stablecoin, providing a dollar-pegged asset that underpins market stability.
Currently operating on the Polygon network, where pUSD is minted, the new protocol is also designed to support transferring positions, collateral, and market outcome information between different blockchains. However, Polymarket has not disclosed which chains it plans to support or when cross-chain features will launch.
Upgradeable Contracts and Oracle Integration
Protocol V2 introduces upgradeable smart contracts, allowing Polymarket to implement changes and add new features through a secure governance process rather than deploying new contracts for every update.
The protocol also features OracleAggregator, a system designed to connect with multiple oracles including UMA and Chainlink to determine market outcomes, enhancing decentralization and data robustness.
The new contracts have undergone audits by security firms such as Cantina, Quantstamp, and Zellic, as well as formal verification by Certora. Polymarket has launched a bug bounty program offering up to $5 million for identifying critical vulnerabilities.
Migration Details and User Impact
According to the Protocol V2 migration guide, existing user positions will not be converted automatically to the new protocol. Polymarket’s applications and websites will continue to support legacy contracts, so users will not need to perform technical migration steps.
However, users may be prompted to approve interactions with new contracts when trading post-launch, reflecting the integration of the updated infrastructure.
Why it matters
The Protocol V2 upgrade marks a fundamental milestone for Polymarket in enhancing its prediction market platform’s features, security, and contract manageability. Consolidating contracts and employing pUSD—a collateral token pegged to USDC—provides a more stable and scalable foundation. The multi-oracle integration improves data reliability, while cross-chain transfer capabilities — although not yet launched — position the platform for expansion to additional blockchains, potentially broadening its user base and market reach. Furthermore, extensive audits and a substantial bug bounty program reduce vulnerability risks, bolstering user confidence.
Prepared from the source material with AI-assisted editing and checked against the supplied facts.
Open original source ↗