The fee is the house. Most strategies in the ledger lost to it before their edge was ever tested, so it is worth knowing exactly what it costs at every price.
The formula
Polymarket and Kalshi charge takers 0.07 x p x (1-p) per share, where p is the price paid. That is nothing at the extremes and 1.75 cents at 50 cents. Kalshi rounds the total up to the cent per order. Makers pay nothing on all four exchanges.
What it does to the breakeven
A favourite at 85 cents pays 0.89 cents of fee, so it must win 85.9 percent of the time just to break even. The book is calibrated: an 85-cent favourite wins about 85 percent of the time. That gap, under one point, is the whole game for a taker.
The other two exchanges
- Predict.fun
- 0.018 x min(p, 1-p) per share, charged in outcome shares. Cheaper than the big two at every price.
- Limitless
- A percentage of price, about 3 percent at 50 cents falling to under half a percent near 1.00, paid in outcome tokens. Expensive for underdogs, nearly free for strong favourites. Verify the current curve before you rely on it.
Why the maker rebate cannot fix it
Polymarket pays makers a 20 percent rebate on the taker fee their fills generate. The taker fee is proportional to p(1-p), and so is the adverse selection a resting quote suffers, so the rebate returns a flat quarter of what the quote loses, at every price. The seat breaks even at a rebate near 45 percent. That is one API field to watch; until it moves, passive quoting on the short markets loses.