Polymarket Launches pUSD in Major Polygon Protocol Upgrade

Polymarket launches pUSD, a USDC-backed ERC-20 on Polygon, cutting gas fees and failed trades with audited CTFv2 smart contracts

Polymarket has announced a protocol upgrade that introduces Polymarket USD, known as pUSD, as part of its system changes on Polygon.

The update focuses on improving trade execution, lowering costs, and simplifying how balances are managed. The company stated that daily use will remain the same, but the underlying process will change through a new collateral structure.

Introduction of pUSD as Collateral Token

Polymarket USD, or pUSD, is a new ERC-20 token built on the Polygon network.

It acts as the platform’s collateral token and is fully backed by USDC.  When users deposit USDC, their balances appear as pUSD within the system.

These balances can be converted back to USDC at any time during withdrawal.

The platform explained that pUSD is a technical layer that operates behind the scenes.

Users will still deposit funds, place trades, and withdraw in the same way. The company stated, “pUSD is the technical layer underneath,” meaning the upgrade does not change the visible user flow.

The token does not rely on algorithmic mechanisms or fractional reserves. Instead, each unit of pUSD is backed by USDC held within the system.

The smart contract enforces this backing and manages withdrawals. This structure aims to maintain a direct link between pUSD and USDC at all times.

Improved Trading Efficiency and Lower Costs

The upgrade introduces changes that target failed trades and high gas fees. Polymarket stated that nonce-related execution failures will be removed.

These failures had caused issues in earlier versions of the platform. The new system reduces such errors and improves trade reliability.

Gas costs are also expected to decrease due to more efficient contract libraries.

The company noted that users can migrate through a one-click process. This approach reduces friction and allows users to move to the updated system quickly.

The platform also updated how fees are handled. Fees are now calculated at the time of trade matching instead of order placement.

This change removes certain edge cases that previously caused execution problems. As a result, users are expected to experience smoother transactions.

Read Also:

Contract Security and System Architecture Changes

Polymarket confirmed that its CTFv2 contracts have been audited by Cantina and Quantstamp.

These audits review the smart contracts for security and reliability. The company also plans to release the contract code publicly and launch a bug bounty program.

The new architecture introduces changes to order management. Orders are now tracked using timestamps and signatures instead of on-chain nonces.

This method reduces issues tied to nonce invalidation and improves order tracking.

The central limit order book also receives updates. The system now reduces race conditions linked to balance checks.

This change aims to improve execution consistency. According to the platform, these updates lead to fewer failed trades and more stable performance.

Polymarket stated that the protocol continues to settle all activity in native USDC. This approach supports scalability and aligns with broader market standards.

The upgrade combines this settlement model with the new pUSD layer to improve internal operations while keeping the user experience unchanged.

The post Polymarket Launches pUSD in Major Polygon Protocol Upgrade appeared first on Live Bitcoin News.