ArtBreguez/polymarket-coherence
github.com/ArtBreguez/polymarket-coherence
A small, reproducible study investigating whether Polymarket multi-outcome 'coherence violations' are real arbitrage opportunities or just the bid-ask spread.
Coherence arbitrage research: Scans Polymarket's multi-outcome markets for situations where the sum of probabilities for mutually exclusive outcomes deviates significantly from 100% (coherence violation). The bot demonstrates whether these violations are exploitable or obscured by transaction costs (bid-ask spread).
This repo is a smart analytical study rather than a pure trading bot. It tackles a fundamental issue in prediction market arbitrage: the difference between theoretical incoherence and practical exploitability. 'Coherence violations' occur in multi-outcome markets where, for example, the prices for 'Team A wins' + 'Team B wins' + 'Draw' do not sum to $1.00 (or 100% probability). This bot systematically scans for such deviations and then calculates the true potential profit after accounting for the bid-ask spread, a critical cost often ignored in simple arb calculations. The repo is built in Python and designed to be easily reproducible, making it excellent for educational purposes and for validating the real profitability of such strategies. It runs in a read-only research mode. This is a valuable addition for any trader or analyst looking to build more sophisticated arbitrage bots on Polymarket. Malware risk is low; the code is clear, small (4.7MB), and heavily focused on analysis. This repo offers a solid foundation for building a more complex execution bot on top of a research framework.