Polymarket has begun canary testing on Protocol V2, a rebuilt smart-contract system for its prediction markets, and is tentatively planning to move new markets to the upgraded protocol on November 2. The staged rollout — running new code under live market conditions before a full cutover — is a standard way for onchain platforms to surface flaws before positions and settlements depend on the new contracts.

Rajath Alex, the protocol's lead, said Polymarket will continue testing through October 30. The canary phase gives the company time to observe V2 under real market conditions before the planned switch, and the November 2 date remains tentative, with the schedule adjustable based on testing results. Whether the date holds depends on how that remaining test window goes.

New Architecture Replaces 2019 Framework

Protocol V2 replaces the Conditional Tokens Framework, which dates to 2019 and predates much of the tooling today's onchain markets rely on. The new setup manages positions through a single ERC-1155 contract — a token standard that lets many distinct token types live in one contract — and introduces pUSD as collateral, the asset traders post when taking positions, along with exchanges for market types and a router for transactions.

The first version supports four market types: Binary, Atomic Neg-risk, Incremental Neg-risk, and Combinatorial. Polymarket has also added an OracleAggregator that can connect markets with UMA, Chainlink, and other data sources. Oracles supply the outside information that determines how event contracts settle, so routing markets to multiple providers broadens the sources each market can draw on.

CFTC prediction-market rule proposals have kept attention on how event contracts operate in the United States, a product category the Commodity Futures Trading Commission oversees.

The system includes tools for moving positions, collateral, and market results across blockchains, though Polymarket has not activated those features yet. The company plans to use them when it expands beyond its current network, making the activation of those cross-chain tools a milestone to watch in that expansion.

Alongside the contract upgrade, Polymarket is launching Data API V2, a Rust-based service that organizes market data using the company's own onchain indexer. The change gives developers a new data layer for the V2 rollout — the layer third-party dashboards, trading tools, and analytics services typically read from.

Polymarket odds on a possible October rate hike recently showed how traders use the platform for economic events. The new protocol aims to support more market structures while keeping the contract system simpler than the current setup — notable because the contract layer is where market funds sit and where outcomes are settled.

Six Security Firms Audited the Code

Security reviews covered the V2 code before migration. Cantina, Certora, Quantstamp, SigmaPrime, Zellic, and Pashov completed audits, and Certora also used formal verification, which mathematically checks code behavior against defined rules rather than relying on sampled test cases alone.

Independent audits of this kind are standard preparation for protocols that will hold user funds, and Polymarket pairs them with a bug bounty of up to $5 million for critical findings. The program rewards security researchers who report serious flaws before wider use.

The upgrade arrives as Polymarket adds senior staff and expands its protocol team. Alex joined in May, and the company later hired Bird founder Travis VanderZanden as chief growth officer. A trader's return to Polymarket for a Trump AI wager also drew attention last week. Separately, reports say the company is discussing a $1 billion funding round at a $21 billion post-money valuation.

Source: Blockonomi