Polymarket's CLOBv2 upgrade, launched on April 28, 2026, addresses critical trading issues like ghost fills, improves system reliability, and introduces a new collateral token, pUSD. Here's what you need to know:
- Ghost Fills Fixed: Ghost fills - failed transactions that wasted gas - are significantly reduced by replacing the nonce system with millisecond-based timestamps and a revamped matching engine.
- New Features: The system now supports EIP-1271, enabling smart contract wallets, and uses updated Solidity contracts for better performance.
- pUSD Token: A new ERC-20 token, fully backed 1:1 by USDC, simplifies settlements and eliminates risks tied to bridged USDC.
- Lower Costs: Gas efficiency improved with Solady-based contracts, cutting transaction costs for traders.
- Dynamic Fees: Taker fees are calculated at match time, offering more flexibility and transparency.
The upgrade also cleared all previous orders, requiring traders to resubmit them using pUSD. Early reports showed some settlement issues post-launch, but overall, the changes aim to deliver faster, more reliable trading.
What Are Ghost Fills and How Do They Affect Trading
A ghost fill happens when a trade seems to go through off-chain but doesn't actually settle on the blockchain. In hybrid CLOB systems like Polymarket's, the matching engine works off-chain for faster processing, while settlements are finalized on-chain. When these two systems fall out of sync - where an off-chain engine shows an order as "matched", but the blockchain's smart contract rejects it - a ghost fill is the result. This disconnect can significantly impact trader accounts.
For instance, a trader might see a filled order in the interface, but their wallet balance remains unchanged. Worse, the failed transaction still burns gas - about 1.3 million gas per reverted ghost fill - leaving traders to pay for trades that never actually happened. To make matters worse, the failure rate is skewed. Profitable orders fail 48% of the time, while losing orders fail only 15% - a stark threefold difference. One example highlights this issue: wallet 0x0975c871e591c2a890095720b08386a221b62354 saw 12 out of 34 trades fail between May 1–2, 2026. Of those failed trades, 10 (83%) would have been profitable based on price data at the time.
"Net: capital is being consumed by adverse selection on the small side while wins evaporate via settlement reverts." - murphyxs8-ch1, Technical Reporter, Polymarket GitHub
The ripple effects of ghost fills go beyond individual traders. They distort the order book itself, creating "ghost liquidity" - orders that appear available but aren't actually executable. This misleads traders and disrupts market transparency. Fixing ghost fills is critical for hybrid systems seeking to create a fair and reliable trading experience.
Key Technical Changes in the CLOBv2 Upgrade
The CLOBv2 upgrade, launched on April 28, 2026, introduced a complete overhaul of Polymarket's core backend systems. This included critical components such as the order manager, ledger, executor, balance checker, and tracker. Additionally, the on-chain exchange contract was rebuilt using Solidity 0.8.30, an upgrade from version 0.8.15. A major shift from OpenZeppelin to the Solady library brought notable gas cost reductions and introduced batched minting and merging, streamlining trade execution for users.
Refactored Matching Engine
The matching engine in CLOBv2 underwent a significant redesign. Instead of the sequential nonce system used in V1, orders are now identified using millisecond-based timestamps. This change eliminates the risk of ghost fills caused by mismatches between the off-chain engine and the on-chain contract.
Another improvement is the dynamic fee calculation at the time of matching, allowing for market-specific rates without requiring a new signature for each transaction. The structure of orders has been simplified by replacing fields like nonce, feeRateBps, taker, and expiration with more efficient alternatives: timestamp, metadata, and builder.
Beyond these structural updates, CLOBv2 enhances security by incorporating advanced signature protocols.
EIP-1271 Signature Integration
CLOBv2 now natively supports EIP-1271, enabling smart contract wallets (e.g., Gnosis Safe or Polymarket's proxy wallets) to verify orders directly on-chain. Previously, order signing was restricted to externally owned accounts, which posed challenges for institutional users and market makers. To address this, a new signatureType field was added to the V2 order structure, allowing for seamless handling of different authentication methods.
The upgrade also includes an update to the EIP-712 domain version, moving from "1" to "2". This provides a more secure framework for verifying off-chain signatures on-chain.
On-Chain Order Ownership
With the integration of EIP-1271, the Exchange contract can now confirm programmatically that a specific contract account authorized a trade. This resolves a transparency issue in V1 by cryptographically tying orders to their originating accounts.
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Additionally, the introduction of the builder field replaces the older HMAC-header process. This allows integrators to attach a builderCode directly to orders, making fee attribution and revenue sharing more straightforward and transparent.
pUSD Token Migration: What Users Need to Know
With the CLOBv2 upgrade, Polymarket introduced pUSD, an ERC-20 token on Polygon. This token is fully backed 1:1 by Circle's USDC and enforced through an on-chain mechanism.
According to the Polymarket Help Center:
"pUSD is the new collateral token for Polymarket. It's a regular ERC-20 on Polygon, backed 1:1 by USDC. The smart contract enforces the 1:1 backing, so one pUSD always converts back to one USDC, no fees." - Polymarket Help Center
Previously, using bridged USDC.e introduced additional risks and settlement complexities. With pUSD, Polymarket simplifies settlements by using native USDC, cutting down on liquidity fragmentation. This shift is especially impactful for a platform managing over $900 million in weekly trading volume. The result? Smoother transactions and a more efficient trading experience.
Migration Details
The migration process depends on how users access the platform:
- Web Users: Simply convert USDC to pUSD through a one-time approval prompt.
-
API Traders and Developers: Call the
wrap()function on the Collateral Onramp contract (0x93070a847efef7f70739046a929d47a521f5b8ee) and input the amount in raw 6-decimal units (e.g.,1,000,000equals $1.00).
Developers must also update to the latest SDKs - @polymarket/clob-client-v2 for TypeScript or py-clob-client-v2 for Python. Keep in mind, the older V1 packages are not compatible with the new system.
Key Notes
All open orders from CLOBv1 were cleared during the maintenance period. Users need to re-submit their limit orders using pUSD. Additionally, the V2 fee model now applies only to takers, with fees dynamically calculated and accessible via the getClobMarketInfo() function.
Performance Gains for Traders After the CLOBv2 Upgrade
The CLOBv2 upgrade brings noticeable performance improvements for traders, enhancing speed, efficiency, and liquidity.
Lower Latency and Reduced Gas Costs
One of the standout benefits is faster performance. Polymarket achieved this by completely overhauling its matching engine, including components like the order manager, ledger, executor, and balance checker. They also introduced a streamlined order structure, cutting down processing time for matching and settling orders significantly.
Gas costs have seen a notable reduction as well. The on-chain exchange was rewritten using Solidity 0.8.30, moving from OpenZeppelin to the Solady library to boost gas efficiency. The system now supports batched mint and merge operations, which is a game-changer for high-frequency traders aiming to lower per-transaction costs. Another highlight is the updated fee model: makers incur zero fees, while taker fees are dynamically calculated at the time of matching.
Beyond these technical upgrades, Polymarket introduced measures to encourage deeper liquidity right after the upgrade.
Liquidity Rewards Program
To restore order book depth following the April 28, 2026 migration, Polymarket launched a $1,000,000 liquidity rewards program. This program included a two-hour launch window followed by a full-day rewards phase, designed to quickly rebuild liquidity.
"Polymarket has launched its CLOB v2 exchange and introduced pUSD, requiring users to migrate balances as part of a broader infrastructure overhaul." - AMBCrypto
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This incentive holds weight, especially on a platform that processed around $9.55 billion in 30-day trading volume leading up to the upgrade. Deeper liquidity results in tighter spreads and better pricing, directly benefiting traders.
Recommended Infrastructure for CLOBv2 Trading
With latency improvements in place, high-performance infrastructure becomes crucial for traders seeking optimal execution. Those using automated strategies or API-based trading on Polygon's CLOBv2 system should consider QuantVPS Pro+ or Ultra+ plans. These plans offer 1Gbps+ network speeds and high-performance CPUs, ensuring minimal delays. For traders, achieving millisecond-level connectivity can make a significant difference.
CLOBv1 vs. CLOBv2: What Changed
CLOBv1 vs CLOBv2: Polymarket's Major Trading Upgrade Explained
This section breaks down the key differences between CLOBv1 and CLOBv2, showcasing improvements in order identification, security, and fee flexibility. CLOBv2 doesn't just tweak the old system - it rebuilds the trading infrastructure to tackle the root causes of issues like ghost fills, rather than merely addressing their symptoms.
One of the most impactful updates is in how orders are identified. In CLOBv1, the nonce-based system was prone to exploitation, leading to ghost fills, as discussed earlier. CLOBv2 replaces nonces with millisecond-precision timestamps and introduces native EIP-1271 support. This allows for compatibility with smart contract wallets like Gnosis Safe and institutional-grade multi-signature setups, a significant leap from CLOBv1's reliance on standard EOA signatures.
The fee structure has also undergone a major overhaul. Previously, in CLOBv1, fees were hardcoded into the signed order, making them inflexible. CLOBv2 shifts to a dynamic fee model where fees are determined at match time based on market-specific parameters. This change not only increases flexibility but also eliminates a common friction point that could lead to settlement failures. Here's a detailed comparison of the two versions:
Comparison Table
| Feature | CLOBv1 (Legacy) | CLOBv2 (Upgrade) |
|---|---|---|
| Order Uniqueness | Nonce-based | Timestamp-based (milliseconds) |
| Signature Support | Standard EIP-712 | EIP-712 + EIP-1271 (Smart Contract Wallets) |
| Collateral Token | USDC.e (bridged) | pUSD (1:1 USDC-backed, on-chain enforced) |
| Fee Handling | Embedded in signed order | Set by protocol at match time |
| Order Cancellation | On-chain manual cancel | Operator-controlled pause/unpause |
| Ghost Fill Status | Persistent - nonce exploits | Significantly reduced via engine refactor |
| Gas Efficiency | Standard OpenZeppelin contracts | Solady-optimized with batched operations |
CLOBv2 also introduces a Solidity upgrade with Solady integration, which improves gas efficiency - a crucial enhancement for high-frequency traders. Additionally, the transition from bridged USDC.e to pUSD eliminates the settlement risks tied to cross-chain bridges, further strengthening the system's reliability.
Conclusion: What the CLOBv2 Upgrade Means for Traders
The CLOBv2 upgrade, launched on April 28, 2026, marks a major overhaul of Polymarket's trading infrastructure. By introducing millisecond-precision timestamps to replace the exploitable nonce system, completely rebuilding the matching engine, and transitioning collateral to pUSD, Polymarket has tackled key issues like ghost fills head-on. This upgrade promises better execution and encourages traders to update their systems to fully capitalize on the improvements.
Initial performance reports highlighted some settlement challenges, emphasizing the urgency for traders to adopt the new systems without delay. For those using automated strategies, migrating to @polymarket/clob-client-v2 or py-clob-client-v2 is essential, as V1 SDKs are no longer supported. Additionally, all resting V1 orders were cleared during the transition.
CLOBv2 has redefined trading efficiency. The updated liquidity rewards program now focuses on fill rate and liquidity quality instead of merely rewarding resting orders. In this new framework, execution speed is critical. Running trading bots on low-latency, always-on platforms like QuantVPS provides a significant edge. With order uniqueness now tied to millisecond-level timestamps, precise clock synchronization and dependable network performance are crucial for staying competitive.
FAQs
How can I tell if a trade was a ghost fill?
A trade might be considered a ghost fill when it seems to have executed off-chain but fails to settle on-chain. Typical signs include mismatches, such as trades missing from on-chain settlements or being reverted because of logic errors. Recent V2 upgrades have specifically tackled these ghost order issues to improve reliability.
Do I need to migrate my USDC to pUSD before trading?
To trade on Polymarket, you'll need to migrate your USDC to pUSD. The platform has switched to using pUSD as its collateral token, meaning all users must convert their balances to align with the updated system. This conversion is necessary to ensure smooth access to trading features and compatibility with the platform's new setup.
What do API traders need to change to work with CLOBv2?
API traders need to make a few updates to stay current. First, ensure your order signing aligns with the new order type. Double-check your verifyingContract addresses to confirm they are correct. Next, transition to using the V2 SDK or the SDK v2 package for compatibility. Lastly, replace the chainId parameter with the chain parameter when working with an options object. These changes are essential for smooth operations.
