PredMart > Documentation > FAQ

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 supported Polymarket markets.

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, 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 against existing shares: You need Polymarket shares already in your wallet. The shares are standard ERC-1155 tokens, so no separate Polymarket account is required to deposit them into PredMart.

For leveraged trading: USDC only. You don't need to own Polymarket shares first — PredMart pulls your USDC from your trading Safe, advances additional USDC from the pool, buys the shares on Polymarket's CLOB, and books them as collateral, all in one signed operation. You'll set up a Polymarket trading Safe through PredMart's interface the first time you trade; if you already trade on Polymarket, the same Safe is reused.

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. Above the 80% kink, rates spike sharply to rebalance the pool. See Protocol Constants for the live base rate, kink, and maximum.

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. When bad debt is absorbed by the pool, all lenders share the loss proportionally. PredMart's risk parameters (80% LTV cap, real-time liquidation, per-market 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 ongoing fee is the reserve factor — a portion of interest income goes to the protocol's reserves rather than to lenders. Additionally, lenders receive a share of the 10% profit fee, split between lenders and the protocol (see Protocol Constants), collected when leveraged positions close with gains.

Borrowing Questions

What can I use as collateral?

Polymarket outcome shares (CTF ERC-1155 tokens) can be used as collateral, but not every market is eligible — low-volume or thin-liquidity markets are excluded. For eligible markets, your actual borrowing power is the smallest of: a per-market liquidity-based cap, an on-chain per-token concentration cap (5% of pool assets), and a hardcoded backend ceiling (EFFECTIVE_CAP_USD = $500 at current settings).

How much can I borrow?

Your maximum borrow depends on: 1. Your collateral value: Number of shares × current price 2. The LTV ratio: A flat 80% at all prices 3. Per-market cap: A liquidity-based ceiling that varies by market 4. The pool cap: Maximum 5% of pool assets per token (on-chain), with a hardcoded EFFECTIVE_CAP_USD = $500 backend ceiling that typically binds tighter 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 the kink (80%), then increases steeply above it. Interest accrues continuously, per-second. See Protocol Constants for the live base rate, kink, and maximum.

What is the health factor?

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

Health Factor = (Collateral Value × Liquidation Threshold) / Debt

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 fully liquidated (similar to perpetual futures on Binance/Bybit/OKX). PredMart's dedicated liquidator responds within seconds: - 100% of your collateral is seized and sold on Polymarket's CLOB - Your outstanding debt is repaid from the sale proceeds - A liquidator fee (on the debt amount) is paid to the liquidator — see Protocol Constants - Any residual USDC after debt and fee is retained by the lending pool — it raises the pUSDC value for lenders but is not returned to you

This full-liquidation model means a liquidated borrower forfeits the entire collateral value, not just the amount needed to cover the debt. To preserve any residual equity, exit your position (repay, manual close, or stop-loss) before your health factor crosses 1.0.

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, and how fast?

Liquidations are executed exclusively by PredMart's dedicated liquidator (not third parties), within seconds of a position becoming unhealthy. Seized collateral is then sold on Polymarket — small positions with market orders, larger positions with limit orders 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. The shortfall is absorbed by the lending pool, and all lenders share the loss proportionally. Borrowers are not on the hook beyond their deposited collateral (the protocol is non-recourse); for lenders, bad debt slightly reduces the value of pUSDC shares.

Market Resolution Questions

What happens when a Polymarket market resolves?

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

Do I need to do anything when a market resolves?

Typically no. PredMart's resolution monitor handles the process automatically in most cases — you don't need to manually redeem shares, repay debt, or close your position. The process usually completes 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?

PredMart uses a flat 80% LTV at all share prices, giving a maximum theoretical leverage of 5x. See Protocol Constants for the LTV and Protocol Constants for the liquidation threshold.

In practice, target ~4x rather than the full 5x so you keep a buffer above liquidation. Starting at exactly 5x means a single tick of price movement triggers liquidation.

Is there an entry fee?

Yes. A one-time, risk-based entry fee is taken from your deposit when you open a borrow or leverage position. It scales with risk (higher for lower-priced shares, up to a cap) and accrues to lenders. See Protocol Constants.

How does automated leverage work?

PredMart offers automated leverage where you sign a single LeverageAuth EIP-712 message, and the backend handles everything for you. The protocol pulls your USDC from your Safe, advances additional USDC from the lending pool, buys shares on Polymarket's CLOB, then deposits all shares as collateral and formalizes the advance as debt — all in one operation. The allowedFrom field in your signature specifies your Safe address, and the smart contract enforces that funds can only go there — the relayer cannot redirect your USDC anywhere else.

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).

Is Take-Profit / Stop-Loss guaranteed?

No. TP/SL triggers an automatic close when the market price hits your target, but the execution price may differ from the trigger price due to slippage and available liquidity. PredMart does not guarantee that your position will close at the exact trigger price.

Technical / Developer Questions

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

Yes, for most operations: lender USDC deposit/withdraw, collateral deposit, and debt repayment can all be called directly. Borrowing, leveraging, and collateral withdrawal require oracle-signed price data, so they must go through PredMart's relay API.

Is there an API I can use?

Yes. PredMart provides a REST API at https://api.predmart.com. Interactive Swagger documentation is available at api.predmart.com/docs. See the Smart Contract Reference for events you can subscribe to.

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?

What happens if PredMart (the company) shuts down?

The smart contract on Polygon keeps running, but not every operation continues to work. Still works without PredMart's infrastructure: USDC lenders can deposit and withdraw directly, and borrowers can repay debt directly to the contract. Stops working: collateral withdrawals, new borrows, leverage operations, liquidations, and on-chain market resolution all require PredMart's relay service plus oracle-signed prices. So in a full shutdown, a borrower could pay off debt to zero but could not retrieve their share collateral until the relay service was restored. Lender USDC is the most resilient asset; borrower collateral depends on the relay being operational.

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.

Is the timelock active?

Yes, the timelock is active. All timelocked operations (oracle changes, LTV parameter updates, contract upgrades) require a mandatory waiting period before they can execute, giving users time to exit if they disagree. The timelock uses a one-way ratchet — it can only be increased, never decreased. The current delay is visible on-chain via timelockDelay().

Still Have Questions?

If your question isn't answered here, you can: - Visit predmart.com/support for direct support - Explore the detailed documentation pages linked throughout this FAQ - Check the Smart Contract Reference for technical details - Review the API documentation at api.predmart.com/docs