Conditional Tokens
ERC-1155 tokens representing binary outcome positions on Polymarket, issued and settled by the Conditional Tokens Framework smart contracts.
Definition
Conditional tokens are the ERC-1155 tokens produced by the Conditional Tokens Framework (CTF). For each binary market, the CTF mints a paired set of YES and NO tokens backed 1:1 by USDC collateral. At resolution, the winning token redeems for $1 and the losing token redeems for $0. The two tokens are complementary: their prices always sum to approximately $1.
In practice
On Polymarket, what traders call a "YES position" is really a balance of a specific conditional token in their proxy wallet. The CLOB API references each outcome by its token_id, which maps to the CTF position ID. A bot tracking whale wallets via the Data API looks at on-chain conditional token balances to infer large positions. Because YES + NO = $1, a bot can also synthetically short YES by buying NO — both are just conditional token purchases on opposite sides.