Original Title: Polymarket Trading Bots: From Zero to Automated Gains
Original Author: @ArchiveExplorer
Translated by: Peggy, BlockBeats
Editor's Note: As Polymarket's trading volume continues to rise, bots are rapidly taking over this open, transparent, and low-cost prediction market. From volume-filling scripts to market-making models, to cross-market arbitrage and AI-driven probability machines, automated strategies are transforming human errors, emotions, and slow reactions into scalable profits.
This article provides a quick overview of how various trading bots operate on Polymarket and the risk logic involved, helping readers understand the underlying reasons why "on-chain markets are inherently suitable for bots."
The following is the original text:
Polymarket is a platform where users can bet on real-world events—elections, sports events, asset prices, legal processes, and more.
The platform operates on the Polygon blockchain and uses USDC as the settlement unit, making the entire trading process transparent, fast, and with almost no fees.
On Polymarket, there are also bots that profit by capturing traders' mistakes, often acting faster than anyone else, exploiting these errors thousands of times a day.
Why are bots thriving on Polymarket?
- Open API and transparent order book, bots can see everything
- Extremely low fees and instant settlement, even tiny price differences can turn into profits
- Millions of trades from humans, many of which… are simply wrong
This is not an article promoting bot tools, but a comprehensive analysis from "the dumbest bots" to "money-making AI monsters."
Low-Tier Bots (DUMB BOT TIER)
Airdrop Farming Bots: Bots that Frenziedly Increase Volume for Airdrops
The market widely anticipates a "big airdrop." These bots do only one thing: frantically increase trading volume—constantly buying and selling, flipping the same position back and forth. No opinions, no judgments, just volume filling.
Example: The bot selects a market with good liquidity, buys YES at $0.10, and then immediately sells it at $0.10. This cycle continues, creating massive trading volume.
Advantages: In reality, none.
Disadvantages: No one knows what criteria the airdrop will be based on; the platform may not count this fake volume at all; you might be frantically increasing volume for an airdrop that doesn't even exist.
Spike Detection Bots: "Spike Detection Bots" that Capture Market Panic
These bots specialize in capturing extreme fluctuations, such as sudden price spikes or drops, and then betting on mean reversion, wagering that prices will return to normal.
How it works: The bot continuously monitors historical prices, calculating the deviation of the current price from the recent average. If the price spikes sharply, the bot quickly places a reverse order (sells); if the price suddenly plummets, the bot quickly buys.
It bets on the market overreacting.
Advantages: Can operate with a small starting capital; logic is simple and easy to understand; can consistently "profit from human emotions and mistakes."
Disadvantages: Not all spikes are false signals; sometimes there is indeed significant news; if stop-loss or target prices are set incorrectly, fees can eat you alive; risk control must be extremely strict, or it leads to chronic bleeding.
Intermediate Bots (INTERMEDIATE BOT TIER)
Market Makers: Market-Making Bots that Profit from Price Differences
These bots make money by continuously placing bid and ask quotes.
The method is simple: the bot places a buy limit order slightly below the market price and a sell limit order slightly above the market price. Once both sides are executed, the price difference is your profit.
Additionally, Polymarket rewards liquidity providers, so this is a dual income source.
Advantages: Profit from price differences + platform liquidity rewards provide two income streams; in calm, low-volatility markets, returns can be very stable; as long as the right market is chosen, the strategy remains effective.
Disadvantages: Requires at least $10,000 in capital for the price difference profits to be meaningful; if the market suddenly moves significantly in one direction, your buy order may get executed just before a sharp drop, trapping you at a very poor price; a bad market can wipe out an entire week's profits.
Advanced Bots (ADVANCED BOT TIER)
Arbitrage: Arbitrage Bots
Arbitrage opportunities arise when the combined prices of complementary outcomes (like YES + NO) total less than 100%.
More complex situations include: arbitrage between multiple related markets; markets that describe the same event with different wording; price discrepancies across different time windows; composite conditions (like combinations such as "blue in a certain state + red nationwide").
As long as the position structure is designed correctly, profits can be locked in regardless of the outcome, and it is truly risk-free profit.
Advantages: Well-constructed arbitrage strategies do not depend on event outcomes; can exploit inefficiencies that humans cannot process in time.
Disadvantages: More and more arbitrage bots are emerging, making arbitrage windows thinner and shorter; seemingly perfect arbitrage strategies on paper are often ruined during execution: there may not be enough liquidity at the required price levels.
AI Bots: Probability Machines
These bots not only monitor prices but also estimate the true probabilities of events more accurately than the market.
The data they ingest includes: historical prices and volumes; news flow and real-time events; on-chain data; whale wallet behavior; and sometimes even social media sentiment.
When the model believes the true probability is 60%, but the market quote is only 40%, the bot will buy undervalued assets and sell overvalued assets, repeating this operation throughout the day.
Advantages: Successful AI models can be applied across hundreds of markets in politics, sports, macroeconomics, etc.; can layer multiple signals: statistical indicators, on-chain information, news flow, behavioral characteristics, etc.
Disadvantages: You need: data pipelines; system infrastructure; machine learning capabilities; financial intuition; risk control frameworks.
Additionally, continuous needs include: storage and computing power; model retraining; real-time monitoring; and almost obsessive risk management.
This is not a side job. This is a real startup.
Tech Stack (Essential Components for All Bots)
Polymarket API: The official documentation includes all real-time data and order submission endpoints. Without an API, there are no bots.
Polygon Wallet: All transactions use USDC on Polygon, requiring a wallet that can sign transactions and manage balances (private keys are essential).
Historical Data Storage: Bots must store prices, volumes, spreads, and market metadata. PostgreSQL is recommended, or a combination of SQL and columnar storage for fast aggregation capabilities.
Python + Basic Toolchain: For API requests, asynchronous execution, data analysis, machine learning, etc.
Conclusion: Why Do Bots Always Win?
- Speed: No emotions, no hesitation
- Discipline: Strictly follow the system, no distractions
- Scale: While you sleep, a bot can monitor thousands of markets simultaneously
- Data Depth: They can integrate prices, order books, news, behavioral patterns, generating signals that you cannot calculate manually.
Trading bots on Polymarket are a truly automated profit-making tool. Of course, the prerequisite is that you understand risk management.
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