# Polymarket Tests Protocol V2 With pUSD Collateral and Unified Positions By Simon Yoon Canonical URL: https://www.tokenpost.com/news/technology/27639 Published: 2026-10-07T21:09:39.000Z Updated: 2026-10-07T21:09:39.000Z Section: Technology > The rebuilt system uses ERC-1155 positions and native USDC for settlement, with canary testing tentatively scheduled through Oct. 30 before a Nov. 2 transition for new markets. Polymarket is testing Protocol V2, a rebuilt smart-contract architecture that standardizes market positions, collateral and trading infrastructure while keeping settlement in native USDC. Production canary testing is tentatively scheduled to continue through Oct. 30, 2026, followed by a planned transition for newly created markets on Nov. 2. The dates are subject to change. The new system uses a unified ERC-1155 position framework and pUSD as its technical collateral layer. pUSD is an ERC-20 token on Polygon backed 1:1 by USDC, with the collateral contract designed to preserve that backing relationship. Trading activity settles in native USDC rather than pUSD. The distinction separates the token used for contract-level collateral management from the asset used to settle trades. The Polygon deployment includes PositionManager, Exchange, Router, CollateralToken, CollateralOnramp, CollateralOfframp and OracleAggregator contracts. The initial release supports binary, atomic neg-risk, incremental neg-risk and combinatorial markets. OracleAggregator can connect to UMA, Chainlink and other data sources for market resolution. The architecture also includes modules for order matching, collateral conversion and cross-chain bridging. The rebuild follows the April 28 exchange upgrade, when pUSD replaced USDC.e as the platform’s collateral token. Existing positions in active markets were set to carry over and resolve normally under that upgrade. Polymarket’s earlier system was built around Gnosis’ Conditional Tokens Framework, which the platform has used since 2019. [Earlier coverage of the canary rollout]() described the testing period for new markets and the planned transition timeline. Protocol V2 brings positions, collateral, exchange functions, routing and resolution into a more standardized contract structure. The next scheduled milestone is the tentative Nov. 2 transition for newly created markets. ## Links in this article - [Earlier coverage of the canary rollout](https://www.tokenpost.com/news/technology/27008)