Recently, news that the prediction market platform Polymarket is considering building its own blockchain has shaken the industry. Originally, this platform, which grew rapidly within the Polygon ecosystem, is now attempting to become independent from its parent chain. This could potentially cause more damage to Polygon than initially expected.

In fact, the challenges Polymarket faces are primarily due to technical limitations. As demand for high-frequency trading surged, issues such as transaction delays and order cancellations began to occur frequently. Worse still, attackers exploited the time lag between off-chain matching and on-chain settlement to repeatedly attack at extremely low costs. These security vulnerabilities have directly caused losses for market makers and automated trading bots. Simple application-level patches are insufficient for a fundamental fix, and a complete redesign of the architecture has become essential.

In late April, Polymarket’s new Vice President of DeFi Engineering revealed that the platform’s growth has far exceeded its infrastructure capacity. The team has begun serious efforts to upgrade the technology, with the most significant change being the consideration of migrating to a new blockchain. Achieving larger block capacity, lower gas fees, and shorter block times is beyond what current Polygon can support.

Notably, multiple public blockchains such as Sui, Solana, Sonic, and Algorand have proposed to attract Polymarket in response. For them, acquiring a large application like Polymarket means more than just adding a new project. It directly impacts transaction traffic volume, a vibrant user base, and the overall ecosystem’s credibility.

This is a key point. According to data from Dune, Polymarket already accounts for 56.3% of Polygon’s total transaction fees. Annually, it generates approximately $72.9 million in fees, which is 61.3% of Polygon’s total fee revenue of about $119 million. In other words, nearly 60% of Polygon’s revenue depends on this single application. If the migration occurs, Polygon’s ecosystem could suffer a serious blow.

Interestingly, industry experts believe that Polymarket is more likely to build its own Layer 2 rather than directly switching to an existing public chain. This would allow full control over block space and gas fees, optimizing for prediction markets and future perpetual products. Additionally, it would provide greater flexibility in regulatory compliance, especially in relation to the CFTC.

Polymarket’s planned upgrades go beyond just migration. They include rebuilding the centralized limit order book (CLOB) from scratch, introducing perpetual products, and transitioning to their own stablecoin, “pUSD.” pUSD is an ERC-20 token backed 1:1 with actual USDC, offering lower systemic risk compared to traditional bridge assets. Furthermore, the approximately $1.25 billion in user wallet holdings could generate an additional $54 million annually through interest operations.

Looking at these developments, it’s clear that Polymarket aims to evolve from a simple prediction market into a comprehensive on-chain trading platform. The organization is restructuring its entire business foundation, strengthening its security team, and unifying developer SDKs. The team has already committed to weekly technical progress reports, moving toward greater transparency.

Polygon has yet to make an official statement, but it’s evident that the infrastructure that once supported Polymarket’s growth is now becoming a limiting factor. As prediction markets move toward mainstream adoption, it’s natural for the platform to seek greater technical freedom.