Polymarket 48h Price Curve Arb Trader

Trades structural mispricings in crypto price-threshold markets by reconstructing the implied probability distribution curve across multiple strike levels an...

Security Scan

The skill's code, documentation, and declared requirements are consistent with an automated arbitrage trader for Polymarket using the Simmer SDK; it defaults to simulation and only requires a single trading API key.

Purpose & Capability

Name/description, SKILL.md, clawhub.json, and trader.py all align: the skill discovers price-threshold markets, reconstructs implied CDFs, detects monotonicity and range-sum violations, and uses simmer-sdk to paper/live trade. The only declared credential (SIMMER_API_KEY) and the single dependency (simmer-sdk) are appropriate for this purpose.

Instruction Scope

SKILL.md instructs discovery, curve construction, ranking, and trading and explicitly defaults to paper trading; trader.py reads only market objects, the declared tunables (via env), and SIMMER_API_KEY. There are no instructions to read unrelated system files or to exfiltrate data outside the trading venue.

Install Mechanism

No install spec writes arbitrary artifacts; clawhub.json declares a pip dependency on 'simmer-sdk' (traceable to PyPI/GitHub). This is proportionate to the stated functionality and avoids risky custom downloads or extract-from-URL installs.

Credentials

The skill requests a single, well-justified credential (SIMMER_API_KEY) and exposes tunables via env. trader.py accesses only those declared environment variables. The credential's sensitivity is acknowledged in the docs.

Persistence & Privilege

autostart is false and always is false; the automaton entrypoint exists but nothing runs automatically until configured. The skill does not request system-wide changes or other skills' credentials.

Assessment

This skill appears coherent, but take normal precautions before enabling live trading: 1) Run it in paper mode first to verify behavior and logs. 2) Review and pin the simmer-sdk package source/version and audit its network endpoints. 3) Provision SIMMER_API_KEY with the minimum permissions necessary and store it securely; avoid using high-value wallet keys. 4) Use small live trade caps and keep tunables conservative initially. 5) Rotate the API key if you remove the skill or suspect misuse. If you need higher confidence, request the full trader.py (untruncated) and inspect simmer-sdk's client implementation for any unexpected external calls.

48h Price Curve Arbitrage Trader

This is a template. The default signal is implied-CDF violation detection across crypto price-threshold markets — remix it with additional assets, curve-fitting models, or cross-venue price feeds. The skill handles all the plumbing (market discovery, curve construction, trade execution, safeguards). Your agent provides the alpha.

Strategy Overview

Polymarket lists dozens of price-threshold markets for the same asset and date:

• "Will BTC be above $64,000 on March 27?"
• "Will BTC be above $68,000 on March 27?"
• "Will BTC be between $68,000 and $70,000 on March 27?"
• "Will BTC be above $70,000 on March 27?"

Retail trades each market as an isolated bet. But together, these markets form an implied probability distribution curve — a CDF of where the market thinks the price will be.

This skill reconstructs that curve and finds where it is mathematically broken.

The Edge: Butterfly Arbitrage for Prediction Markets

In options markets, quant traders analyze the implied volatility surface across strikes to find mispriced options. This is the prediction market equivalent.

Violation Type 1: Monotonicity Break

The probability of being above a lower price must always be greater than or equal to being above a higher price:

P(BTC > $68k) >= P(BTC > $70k) >= P(BTC > $74k)

If a higher strike is priced above a lower strike, the curve is broken.

Violation Type 2: Range-Sum Inconsistency

A "between" market's price must equal the difference of two "above" markets:

P($68k < BTC < $70k) == P(BTC > $68k) - P(BTC > $70k)

If the market prices the range at 54% but the above-markets imply 48%, that's 6% of mathematical arbitrage.

Why This Works

1. Retail trades in silos — most users view each market independently and don't cross-reference the full strike ladder
2. No options infrastructure — unlike traditional markets, there's no market maker maintaining curve consistency across strikes
3. Mathematical, not opinion — the violations are provable inconsistencies, not subjective edge calls
4. High volume — BTC price markets are the most actively traded category on Polymarket

Signal Logic

1. Discover all crypto price-threshold markets via keyword search
2. Parse each question: extract asset (BTC/ETH), strike price(s), date, and type (above/between/dip)
3. Group into curves by (asset, date)
4. For each curve with 2+ points:
   • Check monotonicity across "above" markets
   • Check range-sum consistency for "between" markets
5. Rank violations by magnitude
6. Trade only violations that also pass threshold gates (YES_THRESHOLD / NO_THRESHOLD)
7. Size by conviction (violation magnitude), not flat amount

Safety & Execution Mode

The skill defaults to paper trading (venue="sim"). Real trades only with --live flag.

Scenario	Mode	Financial risk
python trader.py	Paper (sim)	None
Cron / automaton	Paper (sim)	None
python trader.py --live	Live (polymarket)	Real USDC

autostart: false and cron: null mean nothing runs automatically until configured in Simmer UI.

Required Credentials

Variable	Required	Notes
SIMMER_API_KEY	Yes	Trading authority. Treat as a high-value credential.

Tunables (Risk Parameters)

All declared as tunables in clawhub.json and adjustable from the Simmer UI.

Variable	Default	Purpose
SIMMER_MAX_POSITION	40	Max USDC per trade at full conviction
SIMMER_MIN_TRADE	5	Floor for any trade
SIMMER_MIN_VOLUME	5000	Min market volume filter (USD)
SIMMER_MAX_SPREAD	0.08	Max bid-ask spread
SIMMER_MIN_DAYS	0	Min days until resolution (0 = allow same-day)
SIMMER_MAX_POSITIONS	8	Max concurrent open positions
SIMMER_YES_THRESHOLD	0.38	Buy YES only if market probability <= this
SIMMER_NO_THRESHOLD	0.62	Sell NO only if market probability >= this
SIMMER_MIN_VIOLATION	0.04	Min curve violation magnitude to trigger a trade

Edge Thesis

Traditional options markets have market makers who enforce curve consistency (no-arbitrage pricing). Polymarket has no such mechanism — each market is priced by its own order book with its own liquidity pool. This creates systematic micro-inconsistencies in the implied distribution, especially when:

• New markets are created at previously unlisted strikes
• Large directional flow pushes one strike without propagating to neighbors
• Market makers leave gaps during low-liquidity hours

This skill treats the strike ladder as a probability lattice and trades the repair.

Dependency

simmer-sdk by Simmer Markets (SpartanLabsXyz)

• PyPI: https://pypi.org/project/simmer-sdk/
• GitHub: https://github.com/SpartanLabsXyz/simmer-sdk