| name | polymarket-market-maker |
| description | Post two-sided GTC limit orders on Polymarket CLOB. Manages inventory skew, cancel/replace on price drift, and estimates rebate-eligible volume. Based on Akey et al. (2026): market-making reduces loss probability by 35.9 pp — the single strongest edge on Polymarket. |
Polymarket Market Maker
Post two-sided GTC limit orders (bid + ask) on Polymarket CLOB to earn the bid-ask spread as a liquidity provider. This is a developer-only SDK primitive — not a retail "set and forget" skill. You will need to monitor inventory and tune spread/skew parameters to your specific markets.
Why this matters. Akey, Grégoire, Harvie & Martineau (2026) studied 1.4M Polymarket users and $20B in volume. Their headline finding: moving from pure taker to pure market-maker reduces the probability of losing money by 35.9 percentage points — more than 10× larger than any other behavioral predictor (overtrading: 5pp, category concentration: 13.6pp, extreme-price trading: 3pp). This is the single highest-edge behavior on Polymarket.
How it works
Each run (cron or manual):
For each configured market:
1. Fetch current mid price (external_price_yes)
2. Compute bid/ask:
bid = mid - spread/2 (round to 0.01 tick)
ask = mid + spread/2 (round to 0.01 tick)
3. Check inventory: if net_YES_skew > max_skew → pause bidding
if net_NO_skew > max_skew → pause asking
4. Check drift: if existing order price differs from new quote by > drift_threshold
→ cancel and repost
5. Post GTC orders:
BID: client.trade("yes", amount=Q, price=bid, order_type="GTC")
ASK: client.trade("no", amount=Q, price=1-ask, order_type="GTC")
^ Synthetic sell: post NO buy at 1-ask_price instead of YES sell
→ earns maker rebates instead of paying taker fees on exits
6. Log fee-equivalent volume for rebate estimation
Quote structure (synthetic sell on asks)
Polymarket YES and NO tokens are complementary (YES + NO = $1). Instead of posting a sell order on YES (which pays taker fees), this skill posts a buy order on NO at the complementary price:
| Intent | Order posted | Price |
|---|
| Buy YES | BUY YES GTC | mid - spread/2 |
| Sell YES (ask) | BUY NO GTC | 1 - (mid + spread/2) |
This earns maker rebates on both sides (Polymarket Maker Rebates Program). At a taker fee rate of 2%, the rebate formula is:
fee_equivalent = notional_USDC × taker_fee_rate × price × (1-price)
The --status and --cancel-all commands show cumulative fee-equivalent estimates.
Setup
-
Install SDK
pip install -U 'simmer-sdk>=0.13.0'
-
Set API key
export SIMMER_API_KEY=sk_live_...
-
Import markets to Simmer (markets must be imported before the skill can quote them)
from simmer_sdk import SimmerClient
client = SimmerClient(api_key=os.environ["SIMMER_API_KEY"], venue="polymarket")
result = client.import_market("https://polymarket.com/event/will-btc-hit-100k-by-eoy-2026")
print(result["market_id"])
-
Configure markets
export MM_MARKETS=abc123def456,xyz789...
export MM_SPREAD_PCT=0.04
export MM_QUOTE_USDC=10
-
Dry run (default — no orders placed)
python market_maker.py
-
Live trading
python market_maker.py --live
Parameters
| Env Var | Default | Description |
|---|
MM_MARKETS | — | Required. Comma-separated Simmer market IDs |
MM_SPREAD_PCT | 0.04 | Spread as fraction of price (0.04 = 4 cents at 50¢); minimum 0.03 to avoid post-rounding quote collapse |
MM_QUOTE_USDC | 10.0 | USDC per side per market |
MM_MAX_SKEW_PCT | 0.30 | Pause one side when inventory skew exceeds this fraction |
MM_DRIFT_THRESHOLD | 0.02 | Cancel/replace when quote drifts >2¢ from current mid |
MM_TAKER_FEE_RATE | 0.02 | Taker fee rate for rebate estimation (sports: 0.03) |
MM_MAX_MARKETS | 5 | Cap number of markets per run |
MM_STATE_FILE | ~/.simmer/market_maker_state.json | State persistence (order IDs + rebate log) |
CLI commands
python market_maker.py
python market_maker.py --live
python market_maker.py --status
python market_maker.py --cancel-all
python market_maker.py --config
Cron / automaton mode
Run on a cron cadence (e.g., every 5 minutes) to keep quotes fresh. The skill emits {"automaton": {...}} when AUTOMATON_MANAGED=1 is set.
*/5 * * * * AUTOMATON_MANAGED=1 MM_MARKETS=abc123 MM_SPREAD_PCT=0.04 \
python market_maker.py --live
Automaton output fields:
markets — number of markets processedbids_placed / asks_placed — GTC orders submitted this runorders_cancelled — stale quotes cancelledfee_equiv_usd — estimated rebate-eligible volume this runcumulative_fee_equiv_usd — total across all runs
Market selection guidance
Good candidates for market-making:
- Active binary Polymarket markets with reasonable volume (>$5k/day)
- Prices between 5¢ and 95¢ (near-binary markets have poor risk/reward)
- Sports, crypto, and major political markets eligible for Maker Rebates Program
Poor candidates:
- Near-resolved markets (price < 2¢ or > 98¢) — high adverse selection, max loss is max
- Very low liquidity markets — spreads wide but fills rare; capital sits idle
- neg_risk (multi-outcome) markets — price arithmetic differs; this skill uses binary-only math
Inventory management
The skill tracks net inventory per market:
net_skew = shares_YES - shares_NO
When |net_skew| > max_skew_pct × (quote_usdc / price), the over-exposed side stops posting new quotes. This limits directional exposure but does not eliminate it — monitor inventory via --status.
Limitations (v1)
- Binary markets only. neg_risk markets have non-complementary token prices; the
1-ask_yes formula is incorrect for them. The skill will still quote them but the ask leg may misprice.
- No position close automation. The skill posts quotes but doesn't close inventory on resolution. Use
client.auto_redeem() in a separate process or add --cancel-all before market resolution.
- State file is local. If running across multiple machines, the state file can desync. Each instance manages its own orders independently.
References
- Research:
simmer-labs/shared-knowledge/research/2026-04-16-polymarket-winners-losers-study.md
- Synthetic sell:
simmer-labs/shared-knowledge/research/2026-04-14-polymarket-quant-bot-copy-trading.md
- Risk disclaimer: DISCLAIMER.md
