PolymarketDocumentation/docs/developers/CTF/overview.md

Documentation Index

Fetch the complete documentation index at: https://docs.polymarket.com/llms.txt Use this file to discover all available pages before exploring further.

Conditional Token Framework

Onchain token mechanics powering Polymarket positions

All outcomes on Polymarket are tokenized using the Conditional Token Framework (CTF), an open standard developed by Gnosis. Understanding CTF operations enables advanced trading strategies, market making, and direct smart contract interactions.

What is CTF

The Conditional Token Framework creates ERC1155 tokens representing outcomes of prediction markets. Each binary market has two tokens:

Token	Redeems for	Condition
Yes	$1.00 pUSD	Event occurs
No	$1.00 pUSD	Event does not occur

These tokens are always fully collateralized — every Yes/No pair is backed by exactly $1.00 pUSD locked in the CTF contract.

Core Operations

CTF provides three fundamental operations:

Convert pUSD into Yes + No token pairs Convert Yes + No pairs back to pUSD Exchange winning tokens for pUSD after resolution

Token Flow

Token Identifiers

Each outcome token has a unique position ID (also called token ID or asset ID), computed onchain in three steps.

Step 1 - Condition ID

getConditionId(oracle, questionId, outcomeSlotCount)

Parameter	Type	Value
oracle	address	UMA CTF Adapter
questionId	bytes32	Hash of the UMA ancillary data
outcomeSlotCount	uint	2 for all binary markets

Step 2 - Collection IDs

getCollectionId(parentCollectionId, conditionId, indexSet)

Parameter	Type	Value
parentCollectionId	bytes32	bytes32(0) — always zero for top-level positions
conditionId	bytes32	The condition ID from step 1
indexSet	uint	1 (0b01) for the first outcome, 2 (0b10) for the second

The indexSet is a bitmask denoting which outcome slots belong to a collection. It must be a nonempty proper subset of the condition's outcome slots. Binary markets always have exactly two collections — one per outcome.

Step 3 - Position IDs

getPositionId(collateralToken, collectionId)

Parameter	Type	Value
collateralToken	IERC20	pUSD contract address on Polygon
collectionId	bytes32	One of the two collection IDs from step 2

The two resulting position IDs are the ERC1155 token IDs for the Yes and No outcomes of the market.

You can look up token IDs directly via the Gamma API (`GET /markets` or `GET /events` — the `tokens` array on each market contains both outcome token IDs). Computing them manually is only necessary for direct smart contract integration.

Standard vs Neg Risk Markets

Polymarket has two market types with different CTF configurations:

Feature	Standard Markets	Neg Risk Markets
CTF Contract	ConditionalTokens	ConditionalTokens
Exchange Contract	CTF Exchange	Neg Risk CTF Exchange
Multi-outcome	Independent markets	Linked via conversion
negRisk flag	false	true

For neg risk markets, an additional conversion operation allows exchanging a No token for Yes tokens in all other outcomes. See Negative Risk Markets for details.

Contract Addresses

See Contracts for all Polymarket smart contract addresses on Polygon.

Resources

Gnosis Conditional Tokens smart contracts Python and TypeScript examples for onchain operations

Next Steps

Create outcome token pairs from pUSD Convert token pairs back to pUSD Collect winnings after resolution