Polymarket Market Maker

API key required

Posts two-sided GTC limit orders on Polymarket binary markets, managing inventory skew and price drift to earn bid-ask spread and estimate maker rebate volume.

Install

openclaw skills install polymarket-clob-maker

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"])  # use this ID in MM_MARKETS

Configure markets

export MM_MARKETS=abc123def456,xyz789...   # comma-separated Simmer market IDs
export MM_SPREAD_PCT=0.04                  # 4% spread (2¢ each side at 50¢ mid)
export MM_QUOTE_USDC=10                    # $10 USDC per side per market

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              # Dry run
python market_maker.py --live       # Live trading
python market_maker.py --status     # Show active quotes + inventory
python market_maker.py --cancel-all # Cancel all open market-maker GTC orders
python market_maker.py --config     # Print active 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.

# Run every 5 minutes (OpenClaw / cron)
*/5 * * * * AUTOMATON_MANAGED=1 MM_MARKETS=abc123 MM_SPREAD_PCT=0.04 \
  python market_maker.py --live

Automaton output fields:

markets — number of markets processed
bids_placed / asks_placed — GTC orders submitted this run
orders_cancelled — stale quotes cancelled
fee_equiv_usd — estimated rebate-eligible volume this run
cumulative_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