ERC-4626 is the Ethereum tokenized vault standard. It defines a standard interface for yield-bearing vaults: deposit assets, receive shares, redeem shares for assets. By using ERC-4626, Polyark vaults are composable with the broader DeFi ecosystem and investors receive tradeable ERC-20 vault shares that represent their proportional ownership of the vault.

What is the withdrawal timelock?

The withdrawal timelock requires investors to signal their intent to withdraw before actually receiving funds. This gives the vault manager advance warning to manage liquidity — avoiding forced selling of positions at bad prices. The timelock is enforced by the smart contract and cannot be bypassed by the manager.

Polyark Documentation

Q: How do Polyark vaults work?

A trader deploys a vault contract via the Polyark Factory. Investors deposit USDC and receive vault shares proportional to their deposit. The vault manager trades on Polymarket using the pooled capital. The NAV oracle tracks the vault's value in real time. When investors withdraw, they receive USDC at the current NAV per share. Performance fees accrue only on profits above the high-watermark.

Q: What fees does Polyark charge?

Polyark itself charges no protocol fee. Each vault manager sets their own performance fee (typically 10–30%) when deploying their vault. Performance fees use a high-watermark model — the manager only earns fees on net new profits, never on recovering previous losses. There are no management fees or deposit fees.

Q: Who can deploy a vault on Polyark?

Any wallet can deploy a vault via the Polyark Factory contract. There is no permission or KYC requirement at the smart contract level. Vault managers set their own performance fee, minimum deposit, and other parameters at deployment. Polyark is currently in private beta — vault deployment is available to approved traders on the waitlist.

Q: What is the kill switch?

The kill switch is an automatic circuit breaker built into every Polyark vault. If the vault NAV drops beyond a configured threshold from its high-watermark, the contract automatically halts new deposits and restricts trading. This gives investors time to assess the situation and withdraw if they choose. The threshold is set at vault deployment and cannot be changed by the manager.

Polyark is on-chain fund infrastructure for Polymarket prediction market traders. This page covers how the protocol works, its security model, fee structure, and answers to common questions.

What is Polyark?

Polyark solves a structural gap in prediction markets: skilled traders are capped by their own capital. There is no clean way to raise outside money from investors without legal overhead, custodial risk, or trust in the manager's goodwill.

Polyark replaces that trust with code. Traders deploy ERC-4626 vaults through the Polyark Factory contract. Investors deposit USDC and receive vault shares. The manager trades Polymarket on behalf of the vault. Smart contracts enforce the fee terms, trading restrictions, and investor protections — nothing can be overridden by any party.

The result is a permissionless, non-custodial fund marketplace built on top of Polymarket's prediction market infrastructure.

How it works

The lifecycle of a Polyark vault has four stages:

Deployment. A trader calls the Polyark Factory to deploy a new vault contract. They set the performance fee, minimum deposit, and drawdown threshold at deployment. These parameters are immutable once set.
Capital raise. Investors deposit USDC into the vault. They receive ERC-20 vault shares proportional to the current NAV per share. Shares are transferable and can be traded on the secondary market.
Trading. The vault manager places trades on the Polymarket CTF Exchange using the vault's USDC balance. The smart contract whitelists only the CTF Exchange — funds cannot be sent anywhere else. The NAV oracle tracks the vault's value in real time.
Withdrawal. Investors signal withdrawal intent (triggering the timelock). After the timelock period, they redeem their shares for USDC at the current NAV per share. Performance fees accrue to the manager only on net new profits above the high-watermark.

Participants

Vault managers (traders)

Traders with a verifiable edge on Polymarket. They deploy vaults, set their fee terms, and trade the pooled capital. Their performance is fully on-chain and auditable by anyone. The smart contract prevents them from doing anything other than trading on the whitelisted exchange.

Investors

Anyone who wants exposure to Polymarket returns without trading themselves. They deposit USDC, receive shares, and can withdraw at the current NAV at any time (subject to the withdrawal timelock). They benefit from the manager's edge without needing to manage positions themselves.

Polyark protocol

The Factory and Vault contracts that enforce the rules between managers and investors. Polyark charges no protocol fee — revenue comes from vault managers' performance fees, a portion of which may be shared with the protocol in future versions.

Vaults (ERC-4626)

Every Polyark vault implements the ERC-4626 tokenized vault standard. This means:

Investors receive standardized ERC-20 vault shares that represent their proportional ownership of vault assets.
The deposit, withdraw, mint, and redeem functions follow the ERC-4626 interface, making vaults composable with the broader DeFi ecosystem.
NAV per share is computed as totalAssets / totalSupply — the total USDC value of vault positions divided by shares outstanding.

Vault shares are fully transferable ERC-20 tokens. Investors can sell their position on the secondary market via the Polyark Share Market contract (EIP-712 signed OTC orders) without triggering a withdrawal.

Fee structure

Polyark uses a high-watermark performance fee model. There are no management fees, no deposit fees, and no withdrawal fees.

Fee type	Who sets it	Default	Notes
Performance fee	Vault manager	Manager's choice	Typically 10–30%. Set at deployment, immutable.
Management fee	—	0%	Not supported. Managers earn only on profits.
Deposit fee	—	0%	No fee on USDC deposits.
Withdrawal fee	—	0%	No fee on USDC redemptions.
Protocol fee	Polyark	0%	Currently 0%. Reserved for future governance.

High-watermark explained

The high-watermark is the highest NAV per share the vault has ever reached. Performance fees only accrue on gains above the high-watermark. If a vault's NAV per share drops from 1.50 to 1.20 and then recovers to 1.50, the manager earns zero fees during the recovery — they only earn fees on new gains above 1.50.

This aligns manager and investor incentives: managers are motivated to grow the vault, not to churn returns.

Security model

Every Polyark vault has three built-in investor protections enforced at the EVM level:

Exchange whitelist

The vault contract can only interact with the Polymarket CTF Exchange. The manager cannot send funds to any other address, cannot call any other contract, and cannot withdraw funds to their personal wallet. This is enforced by the smart contract and cannot be changed after deployment.

Kill switch

If the vault NAV drops beyond the configured drawdown threshold (set at deployment), the contract automatically halts new deposits and restricts trading. This circuit breaker protects investors from unlimited losses and gives them time to withdraw. The threshold cannot be raised by the manager after deployment.

Withdrawal timelock

Investors signal their intent to withdraw before they can redeem. This gives the manager advance notice to manage liquidity — avoiding forced selling at unfavorable prices. The timelock is fixed at deployment and cannot be extended by the manager to trap investor funds.

Polyark is currently in private beta on Ethereum Sepolia testnet. A formal third-party security audit is planned before Polygon mainnet deployment. Do not deposit real funds until the audit is complete and the mainnet launch is announced.

NAV oracle

The Polyark NAV oracle is a Node.js service that reads open positions from the Polymarket CTF Exchange and writes the current vault NAV to the PolyarkOracle contract on-chain at regular intervals. It uses a Chainlink-inspired push model: off-chain computation, on-chain settlement.

The oracle reports the total USDC value of all open positions plus the USDC balance held in the vault. This value divided by total vault shares gives the current NAV per share used for deposits, withdrawals, and fee calculations.

Contracts (Sepolia testnet)

Contract	Address
PolyarkFactory	0x822E14...fEA3
PolyarkOracle	0x956B2A...1211
Sigma Edge Vault	0x2a729F...efEA
MockUSDC	0x9B982B...7305
MockCTFExchange	0xF87c47...F1C5

Glossary

AUM — Assets Under Management

The total USDC value held across all positions and cash in a vault. Drives the absolute size of performance fees.

CTF Exchange — Conditional Token Framework Exchange

Polymarket's on-chain order book. Prediction market positions are represented as conditional tokens (ERC-1155). The CTF Exchange is the only contract Polyark vaults are whitelisted to interact with.

ERC-4626

The Ethereum tokenized vault standard (EIP-4626). Defines a standard interface for vaults that accept a token (USDC) and issue shares representing proportional ownership. See EIP-4626.

EIP-712

Ethereum typed structured data signing standard. Used by the Polyark Share Market for off-chain OTC share order signing — investors can agree to trade vault shares peer-to-peer with cryptographic signatures, settled on-chain.

High-watermark (HWM)

The highest NAV per share a vault has ever reached. Performance fees only accrue on gains above the HWM.

NAV — Net Asset Value

The total value of a vault's assets. NAV per share = total USDC value of vault / total shares outstanding.

OTC — Over The Counter

Direct peer-to-peer trading of vault shares without going through a public exchange. Polyark's Share Market contract facilitates OTC share transfers.

Vault shares

ERC-20 tokens representing proportional ownership of a Polyark vault. Minted on deposit, burned on redemption. Transferable and tradeable.

Frequently asked questions

What is Polyark?

Polyark is on-chain fund infrastructure for Polymarket prediction market traders. It lets skilled traders deploy ERC-4626 vaults, raise capital from investors, trade on Polymarket on their behalf, and earn high-watermark performance fees — all enforced by smart contracts with no intermediaries.

How do Polyark vaults work?

A trader deploys a vault via the Polyark Factory. Investors deposit USDC and receive vault shares. The manager trades Polymarket with the pooled capital. The NAV oracle tracks vault value in real time. When investors withdraw, they receive USDC at the current NAV per share. Performance fees accrue only on profits above the high-watermark.

What fees does Polyark charge?

Polyark charges no protocol fee. Each vault manager sets their own performance fee (typically 10–30%) at deployment. Fees use a high-watermark model — managers only earn on net new profits, never on recovering previous losses. There are no management fees, deposit fees, or withdrawal fees.

What is a high-watermark fee?

A high-watermark means the manager only earns performance fees when vault NAV exceeds its previous all-time high. If a vault drops from $1,000 to $800 and recovers to $1,000, no fee is charged for the recovery — only gains above $1,000 attract fees. This protects investors from paying fees twice on the same capital.

Can I lose my funds on Polyark?

Yes — prediction market trading involves real financial risk and vault NAV can go down. Polyark mitigates risk through a kill switch (halts trading on large drawdowns) and a withdrawal timelock (gives notice before the manager can change strategy). Funds can never be sent outside of the Polymarket CTF Exchange — enforced at the smart contract level.

Is Polyark audited?

Polyark is currently in private beta on Ethereum Sepolia testnet. A formal third-party audit is planned before mainnet launch on Polygon. The contracts use OpenZeppelin's battle-tested ERC-4626 vault standard as a foundation.

How is Polyark different from copy trading?

Copy trading mirrors a trader's positions in your own account — you need capital, execute trades, and manage the complexity yourself. Polyark is a fund model: deposit once, the manager trades pooled capital on your behalf, you receive proportional returns. The key difference is trust enforcement: a copy trading platform relies on platform rules, while Polyark enforces all terms directly in smart contract code that cannot be overridden by anyone.

What is the kill switch?

An automatic circuit breaker in every Polyark vault. If vault NAV drops beyond the configured drawdown threshold, the contract automatically halts new deposits and restricts trading. This gives investors time to assess and withdraw. The threshold is set at deployment and cannot be raised by the manager.

Who can deploy a vault on Polyark?

Any wallet can deploy a vault via the Polyark Factory — no permission or KYC required at the smart contract level. Polyark is currently in private beta. Vault deployment is available to approved traders on the waitlist at polyark.xyz.

What blockchain does Polyark use?

Currently deployed on Ethereum Sepolia testnet. Mainnet target is Polygon, where Polymarket's CTF Exchange operates. All vault contracts are Solidity smart contracts compatible with the EVM.

When is Polyark launching on mainnet?

Polygon mainnet deployment is the next milestone after the current Sepolia testnet phase and a formal security audit. Join the waitlist at polyark.xyz for early access.