Polymarket Passive Income Guide: From Volume Scripts to AI Automation
Polymarket, a leading prediction market platform on Polygon, enables users to bet on real-world events using USDC. This guide outlines strategies for building automated trading bots to profit on the platform, capitalizing on its open API, transparent order books, low fees, and frequent trader errors.
Bot strategies are categorized by complexity:
- **Beginner Bots**: Includes volume-bots for potential airdrop farming (buying/selling the same position repeatedly) and volatility bots that bet on mean reversion after price spikes.
- **Intermediate Bots**: Market-making bots place limit orders to capture bid-ask spreads and earn liquidity rewards, requiring significant capital and carrying volatility risk.
- **Advanced Bots**: Arbitrage bots exploit pricing inefficiencies (e.g., YES/NO pairs summing below 100%), while AI-powered bots use machine learning models to analyze multiple data sources (news, on-chain activity, social sentiment) to identify mispriced probabilities across markets.
All bots require a core tech stack: access to Polymarket’s API, a Polygon wallet with USDC, historical data storage (e.g., PostgreSQL), and Python-based tools for execution and analysis. Success relies on speed, discipline, scalability, and data integration, but effective risk management is essential to avoid significant losses.
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