How Do Polymarket Perps Work? Funding, Margin, and Liquidation Explained (October 2026)
Polymarket Perps are perpetual futures with up to 20x leverage across 67 markets, settled in pUSD. The one number that decides your fate is account equity — collateral plus unrealized PnL at mark price minus fees and funding owed — and liquidation starts the moment equity drops below maintenance margin: 0.5 / MaxLeverage (2.5% on a 20x market).
Perps or predictions — which product am I looking at?
A prediction market share resolves to $1 or $0 when an event settles. A perp never resolves: it tracks an underlying price continuously, pays or collects funding every hour, and can be liquidated. Polymarket runs both side by side — 67 perpetual markets (launched April 21, 2026, expanded September 3, 2026) next to thousands of binary event markets. The risk engines share nothing: no leverage, no funding, no mark price on the prediction side; all three on the perps side.
The market split as of October 2026:
| Group | Markets |
|---|---|
| Equities | 36 |
| Crypto | 24 |
| Indices | 3 |
| Commodities | 4 |
| Total | 67 |
What is equity, and why does my balance lie to me?
Your displayed balance can overstate what you can actually lose: equity = collateral + unrealized PnL at mark − fees due − funding due, marked every 200 ms against the mark price rather than the last trade.
The published formula:
Equity = Collateral + unrealized PnL (at mark) − fees due − funding dueTwo details most traders miss. First, unrealized PnL is marked to the mark price — a median-of-three construction refreshed every 200 milliseconds — not to the last trade on the perp book. You can be liquidated by the mark even when the last print looked friendly. Second, fees and funding are subtracted continuously: a position bleeding funding loses equity while the price goes nowhere.
How does the funding rate actually accrue?
Funding accrues continuously as a trader-to-trader transfer: a 5-second premium sample averaged hourly, plus a 0.01% per-8-hour interest leg, clamped at ±0.05% and capped at 4% of equity per hour.
Funding is a trader-to-trader transfer with no protocol cut. The mechanism, from the official docs:
- Every 5 seconds the protocol samples the premium using impact prices for 1,000 quote notional
- Samples average across a one-hour charge window
- The mean premium runs through an interest leg (0.01% per 8 hours, halved for non-crypto assets) and a clamp of ±0.05% per interval
- The resulting hourly rate settles against every open position, capped at 4% per hour
What that means in dollars: on a 20x position (2,000 notional on 100 equity), even a calm 0.01% hourly rate costs 0.20 per hour — 4.8% of equity per day if it persists. At the 4% cap, the same position bleeds 80 per hour: the entire stack in roughly 75 minutes without the price moving at all. Rare, but the mechanism exists for exactly those days.
How much margin do I need — and how close is liquidation?
Initial margin opens the position and maintenance margin keeps it: IM = notional ÷ leverage; MM = notional × 0.5 ÷ market max leverage (2.5% of notional at 20x).
Initial margin opens the position; maintenance margin keeps it:
- IM = Notional / configured leverage
- MM = Notional × (0.5 / market max leverage) — 2.5% of notional at 20x
Worked example on a 100 deposit in a 20x-max market:
| Leverage | Notional | MM | Adverse move to liquidation |
|---|---|---|---|
| 10x | 1,000 | 25 | ~7.5% |
| 20x | 2,000 | 50 | ~2.5% |
Same deposit, double the leverage, one-third the survivable move — and 2.5% is an ordinary intraday range on index and equity perps. Between healthy and liquidated sits the margin-call state (equity below IM but above MM), where the only allowed actions are reducing exposure or adding collateral.
Margin mode matters too: the web app opens new positions isolated by default (damage contained to that position’s allocation), while cross margin — opt-in through the API on supported instruments — shares collateral and PnL across the cross account, meaning one ugly position can consume the collateral protecting the rest.
What happens at liquidation?
At liquidation the account is flagged, its orders are cancelled, and positions close via reduce-only IOC market orders — each fill paying the normal fee plus a per-market liquidation fee; underwater positions go to the insurance fund, then ADL.
The sequence from the liquidation docs:
- Equity falls below MM (margin ratio below 1) — the account is flagged
- New orders in scope are blocked and resting orders cancelled
- The position closes via reduce-only, immediate-or-cancel market orders sweeping whatever liquidity exists — there is no protective distance from mark
- Every liquidation fill pays the normal fee plus a per-market liquidation fee
If the position is under water, the insurance fund absorbs it; failing that, auto-deleveraging force-closes the most profitable, most leveraged accounts on the opposite side, ranked by AdlIndex = ProfitRatio × Notional / Equity.
What do fees take out of a round trip?
A taker open plus a taker close at 20x costs 1.6% of equity before the market moves — base 0.0400% taker per fill on notional, tiered down to 0.0200% at the $1B volume tier with a −0.0050% maker rebate.
Fees are charged on notional per fill: base tier 0.0400% taker / 0.0125% maker, re-evaluated daily against trailing 30-day volume across seven tiers — down to 0.0200% taker with a −0.0050% maker rebate at the $1B tier. At 20x, a taker open plus a taker close costs 0.04% × 2 × 20 = 1.6% of equity before the market moves a tick.
FAQ
Q: What collateral does Polymarket Perps use? A: pUSD — the platform’s dollar-pegged balance since the April 28, 2026 migration from USDC.e. It is an ERC-20 on Polygon, 1:1 backed by native USDC.
Q: What is the maximum leverage? A: Up to 20x on crypto, index, and commodity markets (10x on some real-world assets) since the September 3, 2026 expansion; MMR scales inversely as 0.5 / MaxLeverage.
Q: How fast is funding charged? A: Sampled every 5 seconds, averaged over a one-hour window, settled hourly, capped at ±4% per hour.
Q: Can the last trade price liquidate me? A: No — margin and liquidation run off the mark price (median of three inputs, updated every 200ms), not the last print.
Q: What happens at liquidation? A: Reduce-only IOC market orders sweep the book; liquidation fills pay an extra per-market fee; underwater positions go to the insurance fund, then ADL ranks counterparties by ProfitRatio × Notional / Equity.
Sources
Disclaimer
Not financial advice. Educational purposes only. Updated October 2026.