Polymarket has rapidly become one of the most profitable protocols in decentralized finance following a recent pricing adjustment, generating approximately $7.1 million in fees during the first week of the second quarter, according to new data.

If this pace continues, the platform could reach an annualized revenue of around $365 million, positioning it among the top fee-generating projects in the sector. It currently accounts for about 96.8% of all onchain prediction market revenue.

The surge follows a pricing update introduced on March 30, which pushed daily fees to roughly $1 million. According to DeFiLlama data, this level has largely been sustained as trading activity remains elevated. As a result, Polymarket now ranks as the eighth-largest DeFi protocol by fees, alongside major players such as Circle, Tether and the derivatives platform Hyperliquid.

Beyond revenue, the platform has also seen strong growth in capital locked within its ecosystem. Total value locked reached more than $432 million on Tuesday, approaching its peak of around $510 million recorded during the US election period in November 2024.

Institutional interest grows despite regulatory risks

Polymarket’s performance has begun attracting attention from traditional financial institutions. Intercontinental Exchange, the parent company of the New York Stock Exchange, expanded its involvement on March 27 by completing a $600 million investment as part of a broader $2 billion commitment. The partnership will see ICE distribute Polymarket’s event-driven data to institutional clients.

At the infrastructure level, the platform is also evolving. It announced plans to replace its existing USDC.e collateral on Polygon with a new token, Polymarket USD, backed 1:1 by USDC. This token will serve as the primary trading collateral as part of an exchange upgrade scheduled for April.

Polymarket continues to build liquidity around major global events, including developments in the US-Iran conflict, oil markets, inflation and equity indices.

Regulatory pressure remains a key challenge

Despite strong revenue growth and increasing institutional interest, regulatory uncertainty continues to pose a risk to the platform’s expansion.

Prediction markets have faced scrutiny from regulators in several jurisdictions. Some US states have expressed concerns, while international actions have included orders to block access in countries such as Hungary and Portugal. Argentina has also imposed a nationwide restriction, arguing that the platform operates as an unlicensed gambling service.

These developments highlight the ongoing tension between rapid growth in decentralized prediction markets and evolving regulatory frameworks.

Sources:

https://cointelegraph.com/news/polymarket-grabs-97-onchain-prediction-market-fees

https://dune.com/queries/6568695/10377483

https://defillama.com/protocol/polymarket

https://defillama.com/fees