How Polymarket CLOB fees actually work
Step-by-step derivation of the Polymarket taker fee formula with a worked example and a chart of where it peaks.
The formula
Polymarket charges takers a fee defined by:
fee = shares * feeRate * price * (price * (1 - price))^exponent
For 5-minute and 15-minute crypto binaries: feeRate = 0.25, exponent = 2. For sports markets: feeRate = 0.0175, exponent = 1. The maker side pays nothing and receives rebates.
Where it peaks
The factor (p * (1 - p))^2 is maximized at p=0.50 and decays symmetrically. For crypto markets that gives ~1.56% notional fee at p=0.50, and ~0.3% at p=0.20 / p=0.80.
Worked example
Buying 100 YES shares at $0.54 in a 5-minute BTC market:
fee = 100 * 0.25 * 0.54 * (0.54 * 0.46)^2
= 100 * 0.25 * 0.54 * 0.0616
= $0.831
That is $0.83 paid on a $54 outlay, ~1.54%.