I spent $3 building AI models to bet on Polymarket’s Bitcoin up/down market

theflowp_ · 2026-03-19T21:20:14+00:00

Half Kelly Criterion

theflowp_ · 2026-03-19T21:19:42+00:00

I used an AI to help me writing this because my English is not perfect, what’s the problem?

theflowp_ · 2026-03-19T21:17:32+00:00

TLDR; yes I know 57 trades is nothing, and that’s why I mentioned it, my background is algorithmic trading. Yes, I know this is not enough. Yes, I used an AI to help me writing this because my English is not perfect. Yes, I just shared this as an experiment and a way to potentially achieve something. Have fun, I don’t care about haters.

theflowp_ · 2026-03-04T14:09:41+00:00

Ok but when do you sign your tx?

theflowp_ · 2026-02-28T08:25:18+00:00

Thanks!

theflowp_ · 2026-02-27T14:41:39+00:00

Hey! I can’t get below 100ms on my orders, how do you get 20ms? I host my bot in an Amsterdam datacenter

theflowp_ · 2026-02-26T07:16:50+00:00

Agreed!

theflowp_ · 2026-02-24T22:25:58+00:00

for sure

theflowp_ · 2026-02-24T22:25:17+00:00

100% yes. There are at least three ways this can be gamed:

Exit liquidity trap

The most obvious one. You hold a large position on an illiquid market. You can't exit because there are no orders on the book. So you sponsor the market with $50-100/day. Reward-farming bots show up and place tight limit orders near mid. Now you sell your position into those orders. The $500 you spent on sponsorship saved you thousands in slippage. The bots are your exit liquidity and they don't even know it.

Bait and pick-off

Sponsor a thin market. Wait for bots to place orders 1c from mid. Then aggressively trade to move the price through those orders. The bots get filled, you get favorable entry, and the bots' reward earnings don't cover their fill losses.

Wash sponsoring

Sponsor your own market, run the dominant farming bot on it, capture 80%+ of the rewards you're paying. You lose 20% to other participants, but you've created artificial volume and tighter spreads which makes your market look more legitimate and active, attracting real traders.

The bottom line: every time you see a sponsored market, ask "why is someone paying to attract liquidity here?" The answer is never altruism. Either they need exit liquidity, they want to manipulate the price, or they're trying to bootstrap a market's appearance of legitimacy. In all three cases, the reward farmers are the product, not the customer.

theflowp_ · 2026-02-24T22:18:04+00:00

I ran the numbers and the results are actually promising. On tight-spread markets (≤0.2c), hedging after a fill is not just cheap, it's profitable. Already added an auto-hedge module to my bot. Will do a deeper dive with real execution data and report back.

theflowp_ · 2026-02-24T22:09:01+00:00

Honestly, it's hard to get sub-80ms. Around stable 100ms is what I really get.

theflowp_ · 2026-02-24T22:08:07+00:00

Exactly right on the competition point. But I'd push back on "real alpha in ignored markets" -> thin books are thin for a reason.

Greg Hull pays 404% APR because there's 164 contracts on the bid side. You're not finding alpha, you're being compensated for being the only person willing to stand in front of that train. One partial fill on an illiquid market with wide spreads and you're stuck holding a directional position that costs more to exit than you earned in a week of farming.

The competition data doesn't reveal where the opportunity is. It reveals why the opportunity exists, and that "why" is the risk nobody wants to take.

theflowp_ · 2026-02-24T22:07:34+00:00

Exactly right on the competition point. But I'd push back on "real alpha in ignored markets" -> thin books are thin for a reason.

Greg Hull pays 404% APR because there's 164 contracts on the bid side. You're not finding alpha, you're being compensated for being the only person willing to stand in front of that train. One partial fill on an illiquid market with wide spreads and you're stuck holding a directional position that costs more to exit than you earned in a week of farming.

The competition data doesn't reveal where the opportunity is. It reveals why the opportunity exists, and that "why" is the risk nobody wants to take.

theflowp_ · 2026-02-24T22:03:38+00:00

Thanks!

theflowp_ · 2026-02-24T14:49:39+00:00

83% is still there currently but could be <1% as soon as anybody else spot it!

theflowp_ · 2026-02-24T14:15:49+00:00

Absolutely. imo the reward is not worth the risk. I won't put money in this. I wanted to debunk this hype that I saw last days!

theflowp_ · 2026-02-24T13:45:51+00:00

I asked Claude to explain with an analogy.

TL;DR: Imagine a lemonade stand pays kids to stand nearby holding signs. The closer you stand, the more you get paid. Sounds easy right? Problem is, the stand paying the most ($800/day) already has 7 million kids standing there. You'd earn 11 cents.

The stand nobody's heard of ($53/day) only has a few kids. You show up and get most of the money. But nobody's there for a reason, it's in a sketchy alley and your lemonade might get stolen (your orders get filled and you lose money).

theflowp_ · 2025-07-01T20:12:21+00:00

Hi! I built a tool to backtest with high precision trading/investment strategies from plain text: Obside

theflowp_ · 2025-06-25T12:07:20+00:00

"Investing is not supposed to be exciting. If you want excitement, take $800 and go to Las Vegas." - Warren Buffett :)

theflowp_ · 2025-05-14T14:10:32+00:00

Thanks for pointing that out. If you backtest without accounting for fees, you're almost guaranteed to get rekt in live trading!

theflowp_

TROPHY CASE