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Frequently Asked Questions

This page answers the most common questions about PredMart, organized by topic. Whether you're a lender, borrower, or developer, you'll find answers to the questions that come up most frequently.

General Questions​

What is PredMart?​

PredMart is a non-custodial lending protocol built on the Polygon blockchain that enables users to deposit Polymarket prediction market shares as collateral and borrow USDC against them. Lenders supply USDC to the pool and earn yield from borrower interest payments. The protocol is designed to unlock liquidity from prediction market positions and enable leveraged trading on any Polymarket market.

Is PredMart custodial? Who controls my funds?​

PredMart is fully non-custodial. All funds — both lender deposits (USDC) and borrower collateral (Polymarket shares) — are held by the smart contract on the Polygon blockchain, not by any person, company, or wallet controlled by PredMart. The smart contract enforces all rules programmatically. PredMart (the team) cannot access, move, freeze, or seize your funds beyond what the contract logic allows.

What blockchain does PredMart run on?​

PredMart runs on Polygon (formerly Matic Network), an EVM-compatible Layer 2 blockchain. Polygon offers very low gas fees (typically less than $0.01 per transaction) and fast block times (~2 seconds), making it ideal for the frequent interactions required by a lending protocol.

What currency does PredMart use?​

PredMart uses USDC.e (bridged USDC) on the Polygon network. The USDC contract address is 0x2791Bca1f2de4661ED88A30C99A7a9449Aa84174. All lending, borrowing, and repayment operations are denominated in USDC.

Do I need a Polymarket account to use PredMart?​

For lending (supplying USDC): No. You only need a wallet with USDC on Polygon.

For borrowing: You need Polymarket shares to use as collateral, which means you need to have traded on Polymarket. However, you don't need an active Polymarket account to deposit shares into PredMart — the shares are standard ERC-1155 tokens in your wallet.

For leveraged trading: You'll need both Polymarket shares (for collateral) and the ability to trade on Polymarket (to use borrowed USDC to buy more shares). PredMart's interface can help you set up Polymarket trading if you haven't already.

Lending Questions​

How do I earn yield on PredMart?​

Deposit USDC into PredMart's lending pool. You'll receive pUSDC vault shares that appreciate in value over time as borrowers pay interest. When you withdraw, you receive your original USDC plus all accrued interest. There's nothing else you need to do — yield accrues automatically.

What is pUSDC?​

pUSDC is an ERC-20 token that represents your share of PredMart's lending pool. It follows the ERC-4626 tokenized vault standard. The value of 1 pUSDC in USDC terms increases over time as interest accrues. You can transfer pUSDC to other wallets, and whoever holds the pUSDC can redeem it for the underlying USDC.

What APY can I expect as a lender?​

The Supply APY depends on the pool's utilization rate — how much of the pool is currently borrowed. At typical utilization levels:

UtilizationApproximate Supply APY
30%~3.6%
50%~8.3%
60%~11.4%
70%~15.0%
80%~19.0%

APY can spike much higher during periods of very high utilization (above 80%), as the kinked interest rate model dramatically increases rates to rebalance the pool.

Can I lose money as a lender?​

Yes, in theory. Bad debt can occur when a borrower's collateral becomes worth less than their debt (an "underwater" position). When bad debt is absorbed by the pool, all lenders share the loss proportionally. However, PredMart's risk parameters (conservative LTV curve, real-time liquidation, depth-gated borrow caps) are designed to minimize the occurrence and magnitude of bad debt.

Is there a lock-up period for lenders?​

No. You can withdraw your USDC at any time, subject to available liquidity. If pool utilization is very high (most USDC is lent out), you may need to wait for borrowers to repay or for utilization to decrease. The steep interest rate above 80% utilization is specifically designed to rapidly restore available liquidity in these situations.

Are there any fees for lending?​

There are no deposit or withdrawal fees. The only "fee" is the reserve factor — 5% of all interest income goes to the protocol's reserves rather than to lenders. You keep 95% of the interest generated.

Borrowing Questions​

What can I use as collateral?​

Any Polymarket outcome share (CTF ERC-1155 token) can be used as collateral. There is no whitelist — if it's a valid token from Polymarket's CTF contract, PredMart accepts it. However, your actual borrowing power is subject to the depth gate (which limits borrowing against illiquid tokens) and the per-token pool cap (5% of total pool assets).

How much can I borrow?​

Your maximum borrow depends on:

  1. Your collateral value: Number of shares × current price
  2. The LTV ratio at the current price: Ranges from 2% (at $0.00) to 75% (at $1.00)
  3. The depth-gated cap: Limits based on the token's orderbook liquidity
  4. The pool cap: Maximum 5% of pool assets per token
  5. Available liquidity: USDC currently in the pool

Your maximum borrow is the minimum of all these constraints.

How does the interest rate work?​

PredMart uses a kinked interest rate model. The rate increases gently as utilization rises from 0% to 80%, then increases steeply from 80% to 100%:

  • At 0% utilization: 5% APR (base rate)
  • At 80% utilization: 25% APR (kink point)
  • At 100% utilization: 300% APR (maximum)

Interest accrues continuously, per-second. Your debt grows every second you have an outstanding loan.

What is the health factor?​

The health factor measures how safe your position is from liquidation:

Health Factor = (Collateral Value × Liquidation Threshold) / Debt
  • Above 1.0: Safe
  • Below 1.0: Your position can be liquidated

Keep your health factor well above 1.0 — ideally above 1.5 for safety.

What happens if my health factor drops below 1.0?​

Your position will be liquidated. PredMart's liquidation engine responds within seconds:

  • If the health factor is between 0.95 and 1.0: up to 50% of your debt is repaid and the corresponding collateral (plus a 5% bonus) is seized
  • If the health factor is below 0.95: up to 100% of your debt can be repaid in a single liquidation

After liquidation, your remaining position (if any) will have a healthier ratio.

Can I repay my loan early?​

Yes. You can repay any amount at any time — partial or full repayment. There are no prepayment penalties. You only owe the original borrow amount plus interest accrued up to the second of repayment.

Do I pay gas fees for borrowing?​

Borrowing and withdrawing collateral are gasless for you. These operations use PredMart's relay system — you sign a message (free), and PredMart's backend submits the transaction and pays the gas.

Depositing collateral, repaying debt, and approvals are direct on-chain transactions that you submit, so you pay the gas (typically less than $0.01 on Polygon).

Can I have multiple positions?​

Yes. Each token ID is a separate, independent position. You can deposit collateral and borrow against multiple different Polymarket outcomes simultaneously. Each position has its own collateral, debt, and health factor. Liquidation of one position does not affect others.

Liquidation Questions​

Who performs liquidations?​

Liquidation on PredMart is performed exclusively by PredMart's relayer — the same backend service that processes borrows and withdrawals. Unlike some protocols where any user can be a liquidator, PredMart's liquidation is handled by the protocol's infrastructure to ensure efficiency and proper oracle-signed pricing.

How quickly does liquidation happen?​

PredMart's liquidation engine is very fast:

  • WebSocket detection: Sub-second — the backend receives price updates from Polymarket within milliseconds
  • Transaction submission: Within 1-2 seconds of detection
  • On-chain confirmation: 2-5 seconds (Polygon block time)
  • Total: Typically under 10 seconds from price drop to liquidation execution

What happens to my collateral after liquidation?​

Seized collateral is transferred to PredMart's admin wallet and then automatically sold on Polymarket's CLOB. Small positions are sold immediately with market orders. Larger positions are sold with limit orders at the midpoint price to minimize slippage.

What is bad debt? How does it affect me?​

Bad debt occurs when a borrower's collateral is worth less than their debt (underwater position). The shortfall that cannot be recovered through liquidation is absorbed by the lending pool — all lenders share the loss proportionally.

For borrowers: if your position goes underwater, your collateral is seized and your debt is written off. You don't owe anything beyond your deposited collateral (the protocol is non-recourse).

For lenders: bad debt reduces the value of your pUSDC shares slightly. The impact depends on the magnitude of the bad debt relative to the total pool size.

Market Resolution Questions​

What happens when a Polymarket market resolves?​

When a market resolves, PredMart automatically processes all affected positions:

  • Winning positions: The collateral shares are redeemed for $1.00 USDC each. Outstanding debt is repaid from the proceeds, and any surplus is sent to the borrower.
  • Losing positions: The collateral shares become worthless. Outstanding debt becomes bad debt, absorbed by the pool.

Do I need to do anything when a market resolves?​

No. PredMart's resolution monitor handles everything automatically. You don't need to manually redeem shares, repay debt, or close your position. The process happens within minutes of Polymarket's resolution.

Can a market resolve while I have a position?​

Yes, and this is expected! Many borrowers hold positions until market resolution. If you're on the winning side, resolution is very favorable — you get your surplus after debt repayment. If you're on the losing side, your collateral is lost, but your debt is also written off (no personal liability beyond the deposited collateral).

Leveraged Trading Questions​

What is the maximum leverage I can achieve?​

Maximum leverage depends on the LTV at the current price:

Share PriceLTVMax Theoretical Leverage
$0.4045%~1.8x
$0.6060%~2.5x
$0.8070%~3.3x

In practice, you should use less than the maximum to maintain a safe health factor.

Is leverage risky?​

Yes. Leverage amplifies both gains and losses. If the share price drops, your losses are magnified, and your position may be liquidated. Only use leverage if you:

  • Have high conviction in the outcome
  • Understand the liquidation mechanics
  • Can actively monitor your position
  • Can afford to lose the collateral

Can I get liquidated if I use leverage?​

Absolutely. Leveraged positions are more sensitive to price drops. The higher your leverage, the smaller the price drop needed to trigger liquidation. Always maintain a comfortable health factor buffer (1.5+ recommended).

Technical / Developer Questions​

What is the contract's Solidity version?​

The contract is compiled with Solidity 0.8.27 using Foundry, with the optimizer enabled (1 run) and via_ir enabled.

Is the contract verified on-chain?​

Yes. The contract source code is verified on Polygonscan and can be reviewed at the proxy address.

Can I interact with the contract directly (without the frontend)?​

Yes, for most operations:

  • Deposit USDC (lending): Call deposit() or mint() directly
  • Withdraw USDC: Call withdraw() or redeem() directly
  • Deposit collateral: Call depositCollateral() directly
  • Repay debt: Call repay() directly
  • Borrow/Withdraw collateral: These require oracle-signed price data, so you must use PredMart's relay API

Is there an API I can use?​

Yes. PredMart provides a comprehensive REST API at https://api.predmart.com. Interactive Swagger documentation is available at api.predmart.com/docs. All lending data, position data, rate history, and relay endpoints are accessible programmatically.

How do I listen for events?​

You can subscribe to events on the lending pool contract using any Polygon WebSocket provider or by polling with eth_getLogs. Key events to monitor:

  • CollateralDeposited, Borrowed, Repaid, CollateralWithdrawn
  • Liquidated, BadDebtAbsorbed
  • MarketResolvedEvent, RedemptionSettled, PositionClosed
  • InterestAccrued

See the Smart Contract Reference for the complete event list.

Safety & Risk Questions​

Is PredMart audited?​

PredMart's smart contract has been developed with security best practices including comprehensive test coverage via Foundry tests. For the latest audit status, check PredMart's official channels.

What are the main risks of using PredMart?​

For lenders:

  1. Bad debt risk — borrower defaults reduce pool value
  2. Temporary illiquidity — high utilization may limit withdrawals
  3. Smart contract risk — potential bugs in contract code

For borrowers:

  1. Liquidation risk — price drops can trigger collateral seizure
  2. Interest rate risk — rates are variable and can increase
  3. Market resolution risk — losing outcomes destroy collateral

For all users:

  1. Oracle risk — centralized oracle is a trust point
  2. Smart contract risk — potential vulnerabilities
  3. Regulatory risk — prediction market regulations may change

What happens if PredMart (the company) shuts down?​

The smart contract on Polygon continues to function independently. Lenders can withdraw, borrowers can repay and withdraw collateral. The oracle and liquidation bot would stop working, so new borrows and automated liquidations would not be possible — but all existing positions and funds remain accessible.

Is there an emergency pause?​

Yes. The admin can pause the protocol, which blocks new deposits and borrows while still allowing repayments and liquidations. This protects the protocol during emergencies without trapping user funds.

Still Have Questions?​

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