Polymarket Teams Up with Circle to Deploy Native USDC as Core Collateral
February 5 — Circle announced a partnership with Polymarket, the leading on‑chain prediction market by trading volume, to replace the platform’s current bridged USDC (USDC.E) with Circle’s native USDC stablecoin. The move is timed with a surge in activity across crypto‑based prediction markets, which have been posting record‑high volumes and total value locked (TVL).
Partnership overview
Circle’s press release detailed that the collaboration will see Polymarket adopt USDC as its primary settlement token. Polymarket, which runs on the Polygon network, presently relies on the Polygon‑bridged version of USDC. The transition to the native version is slated for the coming months and is expected to streamline settlement processes and align the market more closely with institutional standards.
USDC, with a circulating supply exceeding $70 billion, is the second‑largest stablecoin by market cap, trailing only Tether (USDT). By integrating this widely accepted dollar‑pegged asset, Polymarket aims to provide traders with a consistent collateral framework that mirrors traditional finance practices.
“Partnering with Circle brings critical infrastructure to our platform,” said Shayne Coplan, Polymarket’s founder and CEO. “A uniform USDC‑based settlement model reinforces market integrity as we scale.”
Market activity at a glance
- 24‑hour trading: Polymarket processed approximately $113 million in trades on the day of the announcement.
- Current TVL: The platform holds around $337.5 million in locked value, according to data from DeFiLlama.
- Fee generation: After rolling out trading fees earlier this year, Polymarket earned roughly $2.6 million in fees and $1.6 million in revenue for the previous month. Early February figures show fees of $708 k and revenue of $459 k.
These numbers reflect a broader upswing in the prediction‑market sector. The three biggest players—Polymarket, Kalshi, and Opinion—have each reported unprecedented monthly volumes over the last quarter. In January, total TVL across crypto‑focused prediction platforms topped $550 million, a new all‑time high highlighted by The Defiant.
Why native USDC matters
- Reduced friction – Native USDC eliminates the need for cross‑chain bridges, cutting latency and potential points of failure during settlement.
- Regulatory alignment – Circle’s compliance framework is widely recognized, which could make Polymarket more appealing to institutional participants and regulators.
- Liquidity efficiency – Direct access to USDC’s deep on‑chain liquidity pools may improve price stability and reduce slippage for large traders.
By moving away from USDC.E, Polymarket also sidesteps bridge‑related risks that have attracted scrutiny after several high‑profile exploits in the wider DeFi ecosystem.
Recent strategic moves
Polymarket’s partnership with Circle follows a series of initiatives aimed at strengthening its market position:
- Fee rollout – The platform introduced trading fees for the first time this year, creating a sustainable revenue stream.
- Institutional outreach – Polymarket secured exclusive prediction‑market agreements with major media outlets, including The Wall Street Journal and Dow Jones, broadening its exposure to professional traders.
- Revenue traction – Early‑year fee revenue already accounts for a significant share of the platform’s earnings, indicating that the fee model is gaining traction.
These steps suggest a concerted effort to transition Polymarket from a purely retail‑focused playground to a more institutional‑grade market infrastructure.
Analyst perspective
The integration of native USDC is likely to reinforce Polymarket’s competitive edge in a rapidly expanding niche. As prediction markets draw more capital, the demand for reliable settlement layers grows. Circle’s reputation for robust compliance and its expansive stablecoin ecosystem provide Polymarket with a foundation that could attract larger liquidity providers and hedge funds seeking exposure to event‑driven positions without the complexities of multiple token wrappers.
However, the move does not eliminate all risk. Market participants will still need to monitor Polygon’s network health and potential regulatory developments surrounding stablecoins. Moreover, the true impact on trading volume will depend on how quickly users adopt the new collateral model and whether the fee structure remains attractive.
Key takeaways
- Polymarket will replace bridged USDC with Circle’s native USDC, streamlining settlement and aligning with institutional standards.
- The platform currently processes over $100 million in daily trades and holds more than $330 million in locked value.
- Prediction markets are experiencing record growth, with TVL surpassing $550 million in January across the sector.
- Recent fee implementation and high‑profile media partnerships indicate Polymarket’s push toward a professionalized market environment.
- Native USDC integration reduces bridge risks, improves liquidity efficiency, and may encourage broader institutional participation.
The partnership marks a notable milestone for both Circle and Polymarket, positioning the latter to capitalize on the accelerating momentum in crypto‑based prediction markets.
Source: https://thedefiant.io/news/defi/circle-partners-with-polymarket-to-integrate-native-udsc
