Polymarket has begun production canary testing for Protocol V2, the company’s planned replacement for the market architecture it has used since 2019. If the current testing phase proceeds as expected, newly created markets are set to begin moving to the new system on Nov. 2, following an October test period.

The upgrade changes how positions are issued, what collateral is used, and how market outcomes can be resolved. Polymarket says the transition will apply only to new markets, while existing positions built on the legacy CTF structure will remain in place on separate contracts.

A new system for newly created markets

According to protocol head Rajath Alex, canary markets will continue running in production through Oct. 30. After that, net-new markets are expected to start routing to Protocol V2 on Nov. 2, though the timeline has been presented as tentative rather than final.

Protocol V2 replaces Polymarket’s older Gnosis CTF adapters with a single ERC-1155 position framework. Under the new design, positions are handled through a common PositionManager and Router, alongside modular market structures intended to support different market types from the same base system.

How positions, collateral and market types change

The rebuild introduces a broader reworking of how Polymarket creates and manages positions. Initial modules are meant to cover binary markets, atomic negative-risk markets, incremental negative-risk markets and combinatorial markets.

Collateral in V2 is unified around pUSD. Polymarket describes pUSD as an ERC-20 token that wraps USDC and USDC.e at a 1:1 ratio through an external vault, with vault reserves required to match or exceed the outstanding pUSD supply.

A modular approach to settlement

Market resolution is also being redesigned. Protocol V2 adds an OracleAggregator layer that can take outcomes from different sources and pass them through one framework for settlement.

Polymarket says UMA and Chainlink will both be able to feed into that system. The UMA module can relay settled UMA outcomes into the aggregator, while Chainlink is used for price-based resolution through Data Streams. The company also describes the OracleAggregator as cross-chain capable through Chainlink CCIP, with Polygon serving as a resolution hub.

Legacy holdings stay separate as developers prepare

Polymarket has said existing CTF markets and positions will not automatically migrate to the new contracts. That means users and developers will need to account for two systems in parallel: legacy holdings under the old architecture and new V2 positions created after the switchover.

The developer timeline starts sooner than the Nov. 2 market transition. Data API V1 is scheduled to retire on Oct. 24, 2026, pushing integrations to Data API V2. The updated API consolidates position routes under /v2/positions and adds endpoints covering user profit and loss, volume, price history, resolutions and service status. It also replaces offset-limit pagination with cursor pagination.

Security reviews and the next confirmed milestones

Polymarket says security reviews for Protocol V2 have been published and that multiple firms conducted contract security assessments. At the same time, critical vulnerabilities remain covered by the platform’s bug bounty program, which continues to offer rewards for serious findings.

The confirmed near-term steps are the remainder of production canary testing through Oct. 30, the Oct. 24 retirement of Data API V1 for developers, and the planned Nov. 2 start date for routing newly created markets to Protocol V2. Users may also encounter new approval prompts as the new contracts and collateral model go live.

Source: crypto.news