Polymarket Arbitrage Bot Drop Exploitation

The report notes that four arbitrage bots dropped from the Polymarket ecosystem on 2026-08-02, likely due to the Spain block or other regulatory/technical reasons. This creates a temporary market inefficiency where prices on related markets (e.g., event outcomes) diverge beyond normal spreads. The strategy involves monitoring active bot counts in real-time via API or order book depth, and when bot participation decreases, identifying cross-market price discrepancies. Entry occurs when the combined implied probability of complementary outcomes sums to less than 95% (or similar threshold) while bots are absent. Exit takes place when spreads normalize to bot-era levels, typically within hours. Results are highly dependent on speed of detection; early actors capture the largest edge. Implementation requires a custom bot that tracks active addresses, market order flow, and uses a multi-market arbitrage calculator. The source is inferred from the report rather than a public repo.