3.1 Maker-Tight

1. Bot Identity

2. Purpose

Maker-Tight is a passive market-making strategy that posts resting maker orders inside the current touch when market conditions are benign (low volatility, adequate volume, clean order flow). It quotes both YES and NO sides at a configurable edge (edge_bps) from the mid-price, sized to clip_size_usd. When spread is too tight to earn the edge, or when order-flow imbalance signals toxic flow, the bot skips the cycle and cancels any open quotes. This is a user-controlled execution tool for posting maker liquidity on predictive-event markets — not a directional betting strategy. Maker rebates (20–25% of platform fees, paid in pUSD) contribute to the overall return profile.

3. Why This Bot Matters

• Quoting into toxic flow without detection

  Informed takers repeatedly fill the maker side immediately after posting, resulting in adverse selection losses that erode the quoted spread over time.

• Posting quotes when spread < min_spread_bps

  Quoting inside an already-tight spread earns no edge; the maker rebate does not cover the risk of being adversely selected on a fast-moving market.

• Inventory skew not applied

  Without skewing quotes toward the short side as inventory builds, the bot accumulates a directional position that violates the passive-maker intent and increases settlement risk.

• feeRateBps hardcoded on signed maker order (V1 pattern)

  CLOB V2 rejects orders with feeRateBps. Maker fees are operator-set at match time; the signed order must not contain this field. Maker fee_bps is capped at 50 bps.

4. Required Polymarket Inputs

5. Required Internal Inputs

6. Parameter Guide

7. Detailed Parameter Instructions

{ "edge_bps": 10 }

if edge_bps < params.hard: return skip('MAKER_TIGHT_SPREAD_TOO_TIGHT')

{ "clip_size_usd": 200 }

if params.clip_size_usd > params.hard: raise ConfigError('PARAMETER_CHANGE_REQUIRES_APPROVAL')

{ "inventory_skew_factor": 0.3 }

bidPrice = mid - edge_half - skew * inventory_ratio; askPrice = mid + edge_half - skew * inventory_ratio

{ "min_volume_24h_usd": 250000 }

if volume_24h < params.hard: return skip('MAKER_TIGHT_SPREAD_TOO_TIGHT')

8. Default Configuration

{
  "bot_id": "strat.maker_tight",
  "version": "2.1.0",
  "mode": "general_live",
  "defaults": {
    "edge_bps": 10,
    "clip_size_usd": 200,
    "inventory_skew_factor": 0.3,
    "min_volume_24h_usd": 250000
  },
  "locked": {
    "edge_bps": {
      "min": 3
    },
    "clip_size_usd": {
      "max": 600
    },
    "inventory_skew_factor": {
      "max": 0.9
    }
  }
}

9. Implementation Flow

1. Check KillSwitch active flag; if active, cancel all open maker quotes and emit no new OrderIntents.
2. Subscribe to ws_market book and trade-tape streams for all eligible markets.
3. Filter markets: 24h volume ≥ min_volume_24h_usd (clob_public). Skip low-volume markets.
4. On each book tick: compute mid = (best_bid + best_ask) / 2; spread_bps = (best_ask - best_bid) / mid * 10000.
5. If spread_bps < 2 * edge_bps: skip cycle — spread too tight to earn edge; emit DecisionReport intent_emitted=false MAKER_TIGHT_SPREAD_TOO_TIGHT (sampled 1/100).
6. Compute order-flow imbalance over last 30s from trade tape. If taker-buy_volume / total_volume > toxic_flow_threshold: skip cycle — MAKER_TIGHT_TOXIC_FLOW_DETECTED.
7. Fetch open YES/NO position from clob_auth to compute inventory_ratio = current_position / max_inventory.
8. Compute skewed bid/ask prices: bidPrice = mid - edge_bps/2/10000 - skew * inventory_ratio; askPrice = mid + edge_bps/2/10000 - skew * inventory_ratio.
9. Apply edge_bps warning threshold: if edge_bps < 6, reduce clip to 50%.
10. Emit OrderIntent YES (post_only=true, side=buy, price=bidPrice, tif=GTC, builder={code, fee_bps: 30}).
11. Emit OrderIntent NO (post_only=true, side=buy, price=ask_of_NO=1-bidPrice, tif=GTC, builder={code, fee_bps: 30}).
12. Note: fees are operator-set at match time in V2 — feeRateBps is NOT on the signed order. Maker fee_bps ≤ 50.
13. Emit DecisionReport with intent_emitted=true, edge_bps, inventory_ratio, skew applied.

10. Reference Implementation

Subscribes to CLOB WebSocket book and trade-tape streams, checks spread and flow conditions, and emits GTC post_only maker OrderIntents inside the touch when conditions are benign.

Pseudocode is language-agnostic. FETCH = read input. EMIT = produce output. Translate to TS/Python/Go/Rust.

FUNCTION onBookTick(market_id, bookTick):
  // --- 0. KillSwitch gate ---
  ks = FETCH internal.killswitch.status
  IF ks.active:
    CANCEL_OPEN_QUOTES(market_id)
    RETURN

  // --- 1. Volume filter ---
  vol24h = FETCH clob_public.GET('/markets/' + market_id + '/volume')
  IF vol24h < params.min_volume_24h_usd_hard:  // 50,000 pUSD
    SKIP 'MAKER_TIGHT_SPREAD_TOO_TIGHT' (volume)
    RETURN

  // --- 2. Spread check ---
  mid        = (bookTick.best_bid + bookTick.best_ask) / 2
  spread_bps = (bookTick.best_ask - bookTick.best_bid) / mid * 10000
  IF spread_bps < 2 * params.edge_bps_hard:  // 3 bps hard floor
    // sample 1/100 for observability
    IF random() < 0.01:
      EMIT DecisionReport(intent_emitted=false, reason='MAKER_TIGHT_SPREAD_TOO_TIGHT')
    RETURN

  // --- 3. Toxic flow detection ---
  tape = FETCH ws_market.tradeTape(market_id, window_s=30)
  takerBuyRatio = tape.taker_buy_volume / (tape.total_volume + 1e-9)
  IF takerBuyRatio > 0.75:
    EMIT DecisionReport(intent_emitted=false, reason='MAKER_TIGHT_TOXIC_FLOW_DETECTED')
    RETURN

  // --- 4. Inventory skew ---
  position    = FETCH clob_auth.GET('/positions?market=' + market_id)
  inventoryRatio = position.yes_notional / params.max_inventory_usd
  skew        = params.inventory_skew_factor * inventoryRatio
  edgeHalf    = params.edge_bps / 2 / 10000

  bidPrice    = round(mid - edgeHalf - skew, 4)
  askPrice    = round(mid + edgeHalf - skew, 4)

  // --- 5. Warning threshold ---
  clipSize = toPusdUnits(params.clip_size_usd)
  IF params.edge_bps < 6:
    WARN('MAKER_TIGHT_EDGE_MARGINAL')
    clipSize = toPusdUnits(params.clip_size_usd * 0.5)

  // --- 6. Emit maker OrderIntents (V2: no feeRateBps; builder field; post_only=true) ---
  // Maker fee_bps <= 50 (V2 maker cap)
  EMIT OrderIntent(
    market_id  = market_id,
    outcome    = 'YES',
    side       = 'buy',
    price      = bidPrice,
    size_pUSD  = clipSize,
    tif        = 'GTC',
    post_only  = true,
    builder    = { code: config.builder_code, fee_bps: 30 },
    negrisk_aware = false
  )
  EMIT OrderIntent(
    market_id  = market_id,
    outcome    = 'YES',
    side       = 'sell',
    price      = askPrice,
    size_pUSD  = clipSize,
    tif        = 'GTC',
    post_only  = true,
    builder    = { code: config.builder_code, fee_bps: 30 },
    negrisk_aware = false
  )

  EMIT DecisionReport(
    intent_emitted = true,
    edge_bps       = params.edge_bps,
    inventory_ratio = inventoryRatio,
    skew_applied   = (skew != 0),
    reasons        = ['MAKER_TIGHT_QUOTING']
  )

SDK calls used

• ws_market.subscribe('book', [market_id])
• ws_market.subscribe('trade_tape', [market_id])
• fetchClobPublic('/markets/' + market_id + '/volume')
• clob_auth.GET('/positions?market=' + market_id)
• toPusdUnits(rawFloat)
• buildOrderTypedData(orderParams, { name: 'CTFExchange', version: '2', chainId: 137 })
• internal.killswitch.status()
• internal.builder_code

Complexity: O(1) per market book tick

11. Wire Examples

Input — what arrives on the wire

WebSocket book tick — benign market, spread 16 bps — ws_market

{
  "market_id": "0xcdef1234567890abcdef1234567890abcdef1234567890abcdef1234567890cd",
  "best_bid": "0.619",
  "best_ask": "0.629",
  "mid": "0.624",
  "spread_bps": "16.0",
  "taker_buy_ratio_30s": "0.52",
  "volume_24h_pusd": "480000",
  "received_at_ms": 1746789800000
}

Output — what the bot emits

OrderIntent — maker bid (YES buy, post_only, GTC)

{
  "intent_id": "oi_01HX9MKRT1A4Z1B",
  "trace_id": "tr_01HX9MKRT1A4VR5",
  "market_id": "0xcdef1234567890abcdef1234567890abcdef1234567890abcdef1234567890cd",
  "outcome": "YES",
  "side": "buy",
  "price": "0.619",
  "size_pUSD": "200.00",
  "tif": "GTC",
  "post_only": true,
  "builder": {
    "code": "0x706f6c7974726164657273000000000000000000000000000000000000000000",
    "fee_bps": 30
  },
  "negrisk_aware": false,
  "decision": {
    "edge_bps": 10.0,
    "inventory_ratio": 0.12,
    "skew_applied": true,
    "reasons": [
      "MAKER_TIGHT_QUOTING"
    ]
  },
  "comment": "fees are operator-set at match time in V2 — feeRateBps is NOT on the signed order"
}

DecisionReport — skipped (spread too tight), sampled 1/100

{
  "report_id": "dr_01HX9MKRT1BZZZ",
  "bot_id": "strat.maker_tight",
  "market_id": "0xcdef1234567890abcdef1234567890abcdef1234567890abcdef1234567890cd",
  "intent_emitted": false,
  "spread_bps": 3.2,
  "reasons": [
    "MAKER_TIGHT_SPREAD_TOO_TIGHT"
  ],
  "sampled": true,
  "evaluated_at_ms": 1746789801000
}

12. Decision Logic

13. Standard Decision Output

This bot returns a OrderIntent object. See OrderIntent schema.

{
  "intent_id": "oi_01HX9MKRT1A4Z1B",
  "trace_id": "tr_01HX9MKRT1A4VR5",
  "market_id": "0xcdef1234567890abcdef1234567890abcdef1234567890abcdef1234567890cd",
  "outcome": "YES",
  "side": "buy",
  "price": "0.619",
  "size_pUSD": "200.00",
  "tif": "GTC",
  "post_only": true,
  "builder": {
    "code": "0x706f6c7974726164657273000000000000000000000000000000000000000000",
    "fee_bps": 30
  },
  "negrisk_aware": false,
  "decision": {
    "edge_bps": 10.0,
    "inventory_ratio": 0.12,
    "skew_applied": true,
    "reasons": [
      "MAKER_TIGHT_QUOTING"
    ]
  },
  "comment": "fees are operator-set at match time in V2 \u2014 feeRateBps is NOT on the signed order"
}

14. Reason Codes

15. Metrics & Logs

Metrics emitted

Alerts

Dashboards

• Grafana — Strategy / MakerTight spread distribution and quote throughput
• Grafana — Strategy / MakerTight inventory ratio and toxic flow skip rate

16. Developer Reporting

{
  "bot_id": "strat.maker_tight",
  "market_id": "0xcdef1234567890abcdef1234567890abcdef1234567890abcdef1234567890cd",
  "mid": 0.624,
  "best_bid": 0.619,
  "best_ask": 0.629,
  "spread_bps": 16.0,
  "edge_bps": 10.0,
  "inventory_ratio": 0.12,
  "skew_applied": true,
  "bid_price": 0.619,
  "ask_price": 0.629,
  "clip_size_pusd": 200.0,
  "toxic_flow": false,
  "intent_emitted": true,
  "reason": "MAKER_TIGHT_QUOTING",
  "emitted_at_ms": 1746789800000
}

17. Plain-English Reporting

18. Failure-Mode Block

19. Failure-Injection Recipes

20. State & Persistence

Cold-start recovery

On cold start, open quote IDs are re-fetched from clob_auth. Inventory is re-read from clob_auth. Book state is rebuilt from first ws_market tick.

21. Concurrency & Idempotency

22. Dependencies

Depends on (must run first)

Emits to (downstream consumers)

External services

23. Security Surfaces

On-chain contract calls

Abuse vectors considered

• Quote stuffing: adversary places and cancels orders to artificially move the mid-price seen by Maker-Tight
• Inventory manipulation: feeding a spoofed position to inflate inventory_ratio and widen quotes
• Open maker orders left live after KillSwitch activation

Mitigations

• Book tick staleness check (> 5s) cancels quotes before accepting an adversarial price update
• Inventory ratio is read from clob_auth (authenticated), not from ws_market (public feed)
• KillSwitch cancels all open quotes immediately on activation
• V2 order timestamp(ms) prevents replay of old signed maker orders
• post_only=true prevents inadvertent taker fills on latency spikes

24. Polymarket V2 Compatibility

API surfaces declared

Networks supported

25. Versioning & Migration

Migration history

26. Acceptance Tests

Unit Tests

Integration Tests

Property Tests

27. Operational Runbook

Maker-Tight incidents are typically elevated toxic flow detection (causing missed quoting) or high inventory ratios requiring manual review. Quote failures due to stale feeds should resolve automatically.

On-call actions

Manual overrides

• —
• —

Healthcheck

GET /internal/health/maker-tight -> 200 if ws_market feed last_seen < 5s, clob_auth reachable, KillSwitch inactive, and at least one market quoted in last 60s.

28. Promotion Gates

A bot does not advance to the next readiness state until every gate below is green. Gates are observable from production data — no subjective sign-off.

Promote to Shadow

Promote to Limited live

Promote to General live

29. Developer Checklist

Ready-to-ship score: 27/27 sections complete · 100%