Polyark Documentation

Polyark is a prediction market fund marketplace built on Polymarket V2 and Ethereum. Skilled traders deploy ERC-4626 vaults, pool investor capital, trade Polymarket on investors' behalf, and earn performance fees enforced by smart contracts — not trust.

What is Polyark

Polyark is on-chain fund infrastructure for Polymarket prediction market traders. It solves a fundamental problem: skilled traders are capped by their own capital, while investors have no trustless way to allocate to prediction market strategies.

Polyark lets a trader deploy an ERC-4626 smart contract vault, set performance fees, and accept USDC deposits from investors. The vault's smart contract enforces that all capital can only flow to Polymarket — the manager cannot withdraw funds to their own wallet.

Investors receive ERC-20 vault shares representing their proportional ownership. They can withdraw at the current NAV at any time, subject to an optional timelock that protects against disruptive large withdrawals.

How it works

The vault's execute() function is the only way to move USDC out — and it only works with addresses on a manager-controlled whitelist. On mainnet that whitelist contains Polymarket's CTF Exchange V2 and Neg Risk Exchange V2 contracts. Nothing else.

Architecture

Polyark consists of four on-chain components and two off-chain services.

• PolyarkFactory — permissionless vault deployer. Anyone can deploy a vault. No KYC or approval required.
• PolyarkVault (ERC-4626) — the fund contract. Holds USDC, issues shares, enforces the whitelist, calculates NAV, manages fees and the kill switch.
• PolyarkOracle — on-chain NAV price feed updated by a keeper service. Used by investor dashboards for real-time NAV display.
• PolymarkShareMarket — EIP-712 signed OTC market for vault shares. Lets investors buy/sell shares peer-to-peer without going through the vault's deposit/withdrawal flow.
• Oracle service — off-chain Node.js keeper that reads on-chain positions and pushes NAV updates to PolyarkOracle.
• Subgraph — indexes vault events (deposits, withdrawals, trades, fee claims) for the dashboards.

Investor: Getting started

You need MetaMask and USDC on Ethereum Sepolia (testnet) or Polygon (mainnet, coming soon).

1. Go to investor.polyark.xyz and connect MetaMask.
2. On testnet, click Mint USDC in the Portfolio tab to get free test tokens.
3. Browse vaults on the home screen. Click any vault to see NAV history, AUM, and manager stats.
4. Select an amount and click Deposit. Approve the USDC spend in MetaMask, then confirm the deposit transaction.

Investing in a vault

When you deposit USDC, the vault mints vault shares at the current NAV per share. If NAV is 1.25 and you deposit 100 USDC, you receive 80 shares (100 ÷ 1.25 = 80).

Your portfolio value is always: your shares × current NAV per share. As the manager makes profitable trades, NAV rises and your portfolio grows. If trades lose money, NAV falls.

Withdrawing

Click Withdraw on any vault you hold shares in. Enter shares to redeem or a USDC amount. The vault burns your shares and releases USDC at the current NAV.

If the vault has a timelock set, your withdrawal enters a queue and is claimable after the timelock expires. You can cancel a queued withdrawal at any time before claiming.

Performance fees on withdrawal: If NAV at withdrawal is above the vault's high-watermark, the manager earns a performance fee on the profit portion. This is deducted from the USDC you receive.

NAV & Oracle

NAV (Net Asset Value) is the price of one vault share in USDC — the vault's total value divided by total shares outstanding.

Vault value includes USDC sitting in the vault plus the current market value of any open Polymarket positions. Open positions are valued using Polymarket orderbook prices, fetched by the oracle service and posted on-chain every few minutes.

During oracle downtime the displayed NAV may be stale. Withdrawals and deposits always use the most recently posted on-chain NAV.

Safety mechanisms

• Whitelist — manager can only call Polymarket contracts. Cannot send USDC to arbitrary addresses.
• Kill switch — auto-triggers at a configurable drawdown threshold. Trading stops, withdrawals continue.
• High-watermark fees — manager earns fees only on new all-time highs. No fee on recovering losses.
• 7-day fee change timelock — manager cannot increase fees without a week's notice.
• Withdrawal timelock — optional delay protecting against flash-withdrawal attacks. Not a lock-up.
• ERC-4626 standard — widely-used, well-understood vault interface compatible with DeFi ecosystem tooling.

Manager: Getting started

You need an Ethereum wallet with ETH for gas (Sepolia ETH on testnet, POL on Polygon mainnet).

1. Go to manager.polyark.xyz and connect MetaMask.
2. Click Deploy Vault and fill in your parameters.
3. Confirm the transaction. Your vault is live immediately — no approval required.
4. Share your vault address. Investors can find it at investor.polyark.xyz.

Deploying a vault

The factory deploys a minimal proxy (EIP-1167 clone) of the vault implementation. Gas cost is typically 300–400k on Ethereum.

You set four parameters at deploy time: vault name (permanent), performance fee, drawdown kill-switch threshold, and withdrawal timelock duration. All except the name can be updated later.

Vault parameters explained

NAV per share

The current price of one vault share in USDC. Starts at 1.0. This is the primary performance metric investors watch.

AUM (Assets Under Management)

Total USDC currently inside the vault. Decreases when buying Polymarket positions, increases when positions are sold back.

Drawdown threshold

How far NAV can fall from its all-time peak before the kill switch fires automatically. Expressed in basis points (2000 bps = 20%). Set this to match your strategy's expected variance — too tight and normal fluctuations trigger it; too loose and investors take on excessive unprotected risk.

High-watermark (HWM)

The highest NAV the vault has ever reached. Performance fees only accrue on gains above this level. If NAV drops from 1.3 to 0.9 and recovers to 1.2, no fee is charged until NAV exceeds 1.3 again. This is the standard hedge fund fee model.

Accrued fees

Performance fees that have built up from profitable redemptions but haven't been claimed yet. Excluded from NAV so they don't inflate other investors' balances.

Executing trades

Trades are executed via the Execute Trade tab. On mainnet, generate calldata using the Polymarket CLOB SDK:

import { ClobClient } from "@polymarket/clob-client-v2";
const clobClient = new ClobClient(host, chainId, signer);
const order = await clobClient.createOrder({ tokenID, price, size, side });
const calldata = await clobClient.encodeMatchOrder(order);
// paste calldata into Execute Trade → Target: CTF Exchange V2

Before your first trade, click Approve Targets to grant exchange contracts USDC spending permission.

Managing fees

Performance fees are held as accruedPerfFees inside the vault. Click Claim Fees in the Overview tab to transfer them to your feeRecipient address.

Kill switch

The kill switch pauses all trading while leaving withdrawals fully operational.

• Auto-trigger — fires when currentDrawdownBps ≥ killSwitchBps, checked after every trade.
• Manual activate — admin can pause at any time from the Overview tab.
• Lift — admin resumes trading. This resets peakNav to the current NAV, restarting the drawdown baseline.

Whitelist management

Only whitelisted addresses can be called via execute(). Maximum 20 targets per vault.

• Add target — adds address, then click Approve Targets to grant it USDC spending permission.
• Remove target — removes address AND atomically revokes its USDC allowance. Use immediately if a Polymarket contract is suspected compromised.

Smart contracts (Sepolia testnet)

All contracts deployed on Ethereum Sepolia (chain ID 11155111). Polygon mainnet coming soon.

Security model

What the protocol guarantees

• Manager cannot send vault funds to arbitrary addresses — only whitelisted Polymarket contracts.
• Reentrancy guards on all state-changing functions.
• Performance fee uses HWM — no fee charged on recovering losses.
• Accrued fees excluded from NAV calculations.
• Withdrawal IDs include a nonce to prevent same-block replay.
• Fee increases have a 7-day timelock. Decreases are immediate.
• Removing a whitelist target atomically revokes its USDC allowance.

What the protocol does not guarantee

• Trading skill. A manager can lose money through bad trades.
• Liquidity. If USDC is in open positions, large immediate withdrawals may fail until positions settle.
• Oracle uptime. NAV display depends on the keeper service running.
• No bugs. Contracts are not yet formally audited by a third-party security firm.

Testnet guide

Polyark is live on Ethereum Sepolia testnet. Everything works exactly as mainnet, with free tokens.

• Free Sepolia ETH (gas): sepolia-faucet.pk910.de
• Free test USDC: click Mint USDC in the Portfolio tab of the investor app.
• MetaMask: add Sepolia (chain ID 11155111), confirm it shows Sepolia before transacting.

FAQ