Hey everyone,
I've been deep in prediction market infrastructure for a while and just open-sourced a market maker bot designed for CLOB-based prediction markets like Polymarket.
What it does:
- Quotes both sides of a binary market automatically
- Adjusts spreads based on order book depth and volatility
- Manages inventory risk to avoid getting stuck on the wrong side of a resolved market
- Built on top of Polymarket's CLOB API with Gnosis Safe / EOA wallet support on Polygon
The core challenge with prediction markets vs. regular markets:
Normal market making is about capturing spread. Prediction markets add a brutal edge case — resolution risk. If you're holding YES at 0.6 and the market resolves NO, you're not just down on the spread, you're down the full position. So the bot has to:
- Track time-to-resolution and widen spreads as resolution approaches
- Reduce inventory exposure on markets with high directional momentum
- Use FAK orders to avoid resting limit orders too long near resolution
Stack:
- Rust
- Polymarket CLOB API
- Polygon (USDC settlement)
- SQLite for order state tracking
What's next:
- Dynamic spread model based on implied volatility
- Multi-market portfolio rebalancing
- Better signal integration (news feeds, oracle data)
GitHub: https://github.com/HarrierOnChain/Prediction-Markets-Trading-Bot-Toolkits
Happy to answer questions on the architecture, risk model, or anything CLOB-related. Always looking for feedback from others building in this space.
Top comments (3)
Excellent work—this clearly shows that prediction-market making is not just standard spread capture with a different API. The combination of time-to-resolution controls, inventory-aware exposure reduction, and FAK execution addresses the real tail risk of holding the losing outcome at settlement. I especially like the decision to widen spreads as resolution approaches, although it would be interesting to see the model also account for liquidity imbalance and sudden information-driven probability jumps. Rust is also a strong choice for maintaining predictable execution and order-state management under fast CLOB updates. The planned portfolio rebalancing and oracle/news integration could make this a very valuable open-source foundation for prediction-market infrastructure.
For sure, are you by any chance developing a Polymarket trading bot as well?
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