Polymarket Arbitrage Bot

A Rust-based arbitrage bot for Polymarket that monitors ETH and BTC 15-minute price prediction markets and executes trades when arbitrage opportunities are detected.

How It Works

The bot continuously monitors two markets:

• ETH 15-minute price change prediction market
• BTC 15-minute price change prediction market

Arbitrage Strategy

The bot looks for opportunities where the sum of two complementary tokens (one from each market) is less than $1.00.

Example:

• ETH Up token: $0.47
• BTC Down token: $0.40
• Total cost: $0.87
• Expected profit: $0.13 (when market closes, one token will be worth $1.00)

When such an opportunity is detected, the bot:

1. Purchases the Up token in the ETH market
2. Purchases the Down token in the BTC market
3. Waits for market resolution to realize profit

Architecture

• API Client (api.rs): Handles communication with Polymarket's Gamma API and CLOB API
• Market Monitor (monitor.rs): Continuously fetches market data for both ETH and BTC markets
• Arbitrage Detector (arbitrage.rs): Analyzes prices and identifies arbitrage opportunities
• Trader (trader.rs): Executes trades in simulation or production mode

Setup

1. Install Rust (if not already installed):

   curl --proto '=https' --tlsv1.2 -sSf https://sh.rustup.rs | sh

2. Build the project:

   cargo build --release

3. Configure the bot:

   • Edit config.json (created on first run) or use command-line arguments
   • Set eth_condition_id and btc_condition_id if you know them
   • Otherwise, the bot will attempt to discover them automatically

Usage

Simulation Mode (Default)

Test the bot without executing real trades:

cargo run -- --simulation

Production Mode

Execute real trades (requires API key):

cargo run -- --no-simulation

Configuration Options

• --simulation / --no-simulation: Toggle simulation mode
• --config <path>: Specify config file path (default: config.json)

Configuration File

The bot creates a config.json file on first run with the following structure:

{
  "polymarket": {
    "gamma_api_url": "https://gamma-api.polymarket.com",
    "clob_api_url": "https://clob.polymarket.com",
    "ws_url": "wss://clob-ws.polymarket.com",
    "api_key": null
  },
  "trading": {
    "min_profit_threshold": 0.01,
    "max_position_size": 100.0,
    "eth_condition_id": null,
    "btc_condition_id": null,
    "check_interval_ms": 1000
  }
}

Important Settings:

• min_profit_threshold: Minimum profit (in dollars) required to execute a trade
• max_position_size: Maximum amount to invest per trade
• check_interval_ms: How often to check for opportunities (in milliseconds)
• api_key: Your Polymarket API key (required for production mode)

How the Bot Detects Opportunities

1. Market Discovery: The bot searches for active ETH and BTC 15-minute markets using Polymarket's Gamma API
2. Price Monitoring: Continuously fetches order book data to get current ask prices for Up/Down tokens
3. Arbitrage Calculation: For each combination (ETH Up + BTC Down, ETH Down + BTC Up), calculates total cost
4. Opportunity Detection: If total cost < $1.00 and profit >= min_profit_threshold, executes trade
5. Trade Execution: Places simultaneous buy orders for both tokens

Notes

• The bot runs continuously until stopped (Ctrl+C)
• In simulation mode, all trades are logged but not executed
• The bot automatically discovers condition IDs if not provided in config
• Make sure you have sufficient balance and API permissions for production trading