Polymarket Perps Explained: Funding, Margin, and Liquidation (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?
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 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; 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?
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?
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.