Oracle Pricing and Borrow Caps

This page explains, at a high level, how PredMart values your collateral and how it decides the maximum you can borrow against any given market. Most users never need to read this — the app just shows you your max borrow. But if you've wondered why your cap is lower on one market than another, or why it shifted, the answers are here.

Two questions, answered separately

Every time you interact with a market, PredMart answers two questions:

1. What is one share worth right now? — the oracle price. This determines how much your collateral is valued at.
2. How much total USDC is the pool willing to lend against this specific market? — the effective cap. A dollar ceiling independent of your personal collateral.

Your borrow is bounded by the smaller of:

• your collateral × oracle price × LTV — limited by your own collateral
• the effective cap — limited by the market's overall health

Most users with small positions hit the first limit. Very large positions (or many users combined on the same market) hit the second.

The oracle price (the Mark)

PredMart's oracle price — the Mark — is the average price to sell $1,000 of shares into the order book. It walks the bid side of the book, summing depth until $1,000 notional is reached, and reports the volume-weighted price across those fills. This is manipulation-resistant: an attacker can't inflate collateral value by posting a thin top-of-book bid, because the Mark reflects real depth.

The Mark is typically a bit below the Polymarket UI's displayed price (usually the midpoint or last trade), and meaningfully below it on markets with wide spreads or thin depth. Sizing is handled separately: the effective cap limits how much the pool will lend against any one market, and borrows are refused against books too thin to absorb a pool-sized exit.

The effective cap

Every eligible market has an effective cap — the maximum total USDC the pool will lend against it. The cap is the smaller of:

• A protocol-wide per-token ceiling (see Protocol Constants).
• A liquidity-based ceiling that varies by market — deeper, more stable markets get larger numbers; thin or volatile markets get smaller numbers, sometimes zero. The exact scoring is monitored continuously off-chain and is intentionally not published.

What you can rely on: - The cap is dynamic — it can shrink as conditions change. - If a market becomes unhealthy, its cap can drop to zero, blocking new borrows there. - This is deliberately aggressive: the pool only wants exposure to markets it can realistically exit.

Market eligibility

Not every Polymarket market qualifies as collateral. Very low-volume or extremely thin markets are excluded because their health signals can't be meaningfully measured. The exact eligibility thresholds are not published — they are operational parameters that may change. If a market you want to use as collateral isn't supported, it's because it currently doesn't meet the eligibility bar.

Protocol-wide rate limiting

Independent of any individual market, PredMart enforces a protocol-wide rate limit on new borrowing. This bounds the worst-case extraction rate if something goes wrong and buys time for human intervention. During ordinary operation it never binds.

Common questions

Why is my max borrow lower than expected?

Either the Mark (depth-weighted price) is below the displayed midpoint, or the per-market effective cap is binding. Large positions hit the cap more often than small ones.

Why can't I borrow against this market?

The market's volume or stability doesn't meet eligibility thresholds, or pricing has been too volatile. Small, active, stable markets are always eligible.

Why did my borrow cap drop?

The effective cap is dynamic — it falls when the market becomes less liquid or more volatile. Deeply liquid markets are affected less.

Why do YES and NO give different caps on the same market?

Each side has its own orderbook. The thin side gets a lower cap because the pool can only lend against collateral it can realistically exit.