Fee Structure Comparison
Prediction market fee structures vary enormously. Polymarket charged zero fees through most of 2025, only introducing taker fees in January 2026 for high-frequency crypto markets. Kalshi uses a variable formula where fees are highest near 50-cent prices and lowest near the extremes. PredictIt charges 10% of gross profits plus 5% on withdrawals, making it the most expensive major platform.
These fee differences have direct strategic implications. On Polymarket (near-zero fees), high-frequency strategies like arbitrage and market making are viable. On PredictIt (high fees), only strategies with large per-trade edges (15%+ expected return) overcome the fee drag.
Fee Impact by Strategy Type
Arbitrage strategies are the most fee-sensitive because the per-trade edge is small (often 2-5%). Even small fees can consume the entire edge. These strategies only work on low-fee platforms.
Carry strategies (buying near-certain contracts at 95+ cents) are moderately fee-sensitive. The per-trade return is 3-5 cents, and a 2% fee on the $1 payout leaves 1-3 cents of net profit. Viable on low to moderate fee platforms.
Information-edge strategies (buying mispriced contracts with 10-20% estimated edge) are less fee-sensitive because the per-trade edge is large enough to absorb moderate fees. These strategies work on most platforms.
Optimizing for Fees
When the same contract is available on multiple platforms, executing on the platform with the lowest effective fee for your trade is a simple optimization that directly improves returns. For arbitrage specifically, the fee differential between platforms is often the binding constraint that determines whether an opportunity is profitable.
Explore these tools on Blockcircle: Prediction Markets Mispricing Engine