Settlement
The on-chain process of transferring USDC from losing to winning outcome token holders after market resolution.
Definition
Settlement is the final step after resolution in which funds move from losing positions to winning positions. On Polymarket, settlement is handled by the Conditional Tokens Framework contracts on Polygon: the winning token redeems at $1 USDC and the losing token at $0. The collateral was locked in the contract at order creation, so settlement is atomic and requires no counterparty action.
In practice
Once the oracle resolves a market, Polymarket's resolver contract sets the payout split (e.g., 100% YES, 0% NO). Holders of winning tokens can then call redeemPositions on the CTF contract, or Polymarket redeems automatically on their behalf and adds the USDC to the wallet balance. From the bot's perspective, settlement is invisible — the proxy wallet balance increases by the winning payout, and the bot's state tracker reads the updated balance via the CLOB API before the next trade.