As of February 20, 2026, Polymarket remains the leading prediction market platform, with massive volume across events like politics, sports, crypto, and more. While most markets stay completely fee-free, a growing subset—5-minute and 15-minute crypto markets, plus new NCAAB (college basketball) and Serie A markets created after February 18, 2026—now feature a taker-fee + maker-rebate model. This change funds incentives for liquidity providers, making midpoint-focused market making even more attractive for patient bots.
In this Medium-style article, we focus purely on a practical, fee-aware midpoint trading strategy. The goal: Provide tight liquidity around the midpoint price, capture spreads passively, earn maker rebates (where applicable), and maximize Polymarket's liquidity rewards program—all while minimizing or avoiding taker fees entirely.
Quick Fee & Incentive Reality Check (Feb 2026)
-- Most markets: 0% fees for everyone. Pure spread + liquidity rewards.
-- Fee-enabled markets (crypto short-term + select sports):
- Takers pay variable fees: Highest ~1.56% at 50¢ price (crypto), lower ~0.44% peak for sports. Formula: fee = [price × (1 - price)]^exponent × fee_rate (exponent 2 for crypto, 1 for sports; fee_rate 0.25 crypto / 0.0175 sports).
- Makers pay 0 fees and earn rebates (20% crypto / 25% sports of collected taker fees, distributed daily in USDC, weighted by your liquidity contribution).
- Rebates are not guaranteed per trade but proportional to how much taker volume your orders attract.
-- Liquidity Rewards (separate from rebates): Available on many markets. Paid daily in USDC for resting limit orders. Rewards favor:
- Tight spreads to the midpoint.
- Two-sided quoting (YES + NO).
- Balanced depth.
- Larger sizes (with min share thresholds per market).
Midpoint monitoring + maker-only behavior = win-win: You avoid fees, capture tiny spreads repeatedly, and stack rewards/rebates.
Core Strategy: Fee-Aware Midpoint Market Making
This is a pure maker approach: Never cross the spread aggressively (no FOK/FAK unless emergency hedge). Stay patient, let others take your liquidity.
1. Target Selection
- Prioritize high-volume, fee-enabled markets for rebates (e.g., 15-min crypto BTC/ETH up/down, NCAAB games).
- Or fee-free high-liquidity markets (elections, major crypto events) for pure spread capture + rewards.
- Avoid thin/illiquid markets unless rewards are outsized.
2. Midpoint as Anchor
- Fetch real-time midpoint via CLOB API (GET /midpoint or WebSocket book updates).
- Midpoint = (best bid + best ask) / 2 (fallback to last trade if spread >10¢).
3. Offset & Quote Logic (Fee-Adjusted)
-- Base offset: 0.5–3¢ depending on market volatility/liquidity.
-- Fee buffer (in fee-enabled markets): Widen offset slightly if near 50¢ (high taker fee zone) to ensure your spread > typical taker cost → more likely to attract fills and rebates.
- Example rule: offset = max(1¢, taker_fee_at_midpoint / 2 + base_spread_target)
- At 50¢ in crypto (taker ~1.56% = 0.78¢ per share), aim for at least 1–1.5¢ spread to stay attractive.
-- Quotes (GTC, post-only if supported):
- Bid (buy): midpoint - offset
- Ask (sell): midpoint + offset
- Always quote both YES and NO tokens → ~3× liquidity reward multiplier.
- Size: 200–2,000 shares per side (meet min_incentive_size from API, scale with capital).
4. Dynamic Requoting & Inventory Control
-- Requote every 10–60 seconds (or on midpoint shift > offset/2).
-- Cancel old orders before placing new (batch to save gas).
-- Inventory cap: ±1,000–5,000 shares net per token.
- If skewed: Widen the overweight side's offset (e.g., if long YES, make ask tighter to encourage sells). Only hedge with taker order (FAK) if skew > cap × 2 and projected gain after taker fee > risk. In practice: Avoid taker hedges 95%+ of time—let natural flow rebalance.
-- Post-only mode (if API supports): Ensures you never take—maximizes rebate eligibility.
5. Profit Layers (Fee Perspective)
-- Layer 1 – Spread capture: Buy low (your bid filled), sell high (your ask filled) → 2×offset gross per round-trip share.
- Net: Full amount (0 maker fee).
-- Layer 2 – Maker rebates (fee markets): 20–25% of taker fees your fills generate. In busy markets, adds meaningful yield.
-- Layer 3 – Liquidity rewards: Daily USDC based on tightness + depth + two-sided. Top makers report 5–20% annualized on deployed capital in rewarded markets.
-- Effective cost: ~0 taker fees (unless rare hedge). Gas on Polygon: negligible (<$0.01/tx).
Example in a Fee-Enabled Market
- Midpoint: 52¢ (YES); crypto 15-min → taker fee ~1.4% at this price.
- Offset: 1.8¢ (wider than fee-free to attract takers).
- Quotes: Buy YES @50.2¢, Sell YES @53.8¢ (and mirror on NO).
- Someone takes your sell: You receive 53.8¢, pay 0 fee, earn ~20% rebate share.
- Rewards: Your tight two-sided quote scores high in daily calc.
- If inventory +3,000 YES: Widen ask to 53¢ → passive rebalance.
Bot Implementation Blueprint (Python Focus)
Use dual-loop architecture:
- Async WebSocket → subscribe to book, update midpoint + fetch fee_rate periodically.
- Sync decision loop → calculate offset with fee buffer, manage inventory, place/cancel GTC orders.
Key API calls:
- CLOB: /midpoint, /book, /fee-rate?token_id=..., POST /order (with post-only flag if available).
- Data API: /positions for inventory.
- Gamma: Discover rewarded markets.
Add safeguards:
- Min spread check > taker fee estimate.
- Volatility pause if midpoint jumps >5¢ in 1 min.
- Daily reward tracking via reward page scrape or API.
Expected Returns & Scaling
- Fee-free markets: 1–8% monthly from spread + rewards.
- Fee-enabled: +rebates → potentially 10–25% annualized on capital in high-volume ones.
- Start small ($500–5k USDC), scale after 1–2 weeks monitoring.
- Competition is rising—tightness + uptime win.
Risks to Remember
- Event resolution can pin inventory (use holding rewards where available ~4% APY).
- Rebates/rewards variable and market-dependent.
- API changes, downtime, or Polygon congestion.
- No directional edge—pure liquidity provision.
Final Thoughts
In February 2026, a midpoint trading bot on Polymarket is one of the cleanest ways to earn passive yield in crypto. By staying strictly maker-side, incorporating the taker-fee curve into offset decisions, and leaning into two-sided quoting, you position yourself to capture spreads, rebates, and liquidity rewards with minimal downside.
If you're ready to code this, start with Polymarket's docs (clob.polymarket.com), test on a fee-free market, then graduate to rebate-eligible ones. Share your bot results or tweaks in the comments—what market type are you targeting first?
This is educational—not financial advice. Prediction markets involve risk of loss. Always DYOR and trade responsibly.
Continuous Updates & Development
This Polymarket trading bot is actively maintained and continuously updated to adapt to new Polymarket trading opportunities, crypto market conditions, and strategy improvements.
New features, optimizations, and trading strategy enhancements are released regularly to improve performance, stability, and profitability.
If you're interested in:
Polymarket trading automation
crypto trading strategies
prediction market bots
or contributing to the project
feel free to stay in touch.
If you'd like to see the system in action, I can arrange a live Google Meeting demonstration to showcase the bot running in real time and explain how the trading strategies operate.
I'm always happy to connect with developers, traders, and researchers working in the Polymarket and crypto ecosystem.
PRs, issues, or strategy ideas? Open them on GitHub:
https://github.com/Gabagool2-2/polymarket-trading-bot-python
Contact info:
Email: benjamin.bigdev@gmail.com
Telegram : https://t.me/BenjaminCup
X: https://x.com/benjaminccup
If you'd like, I can show you a profitable bot in action through a meeting.
Telegram Trial Version Bot
You can also test the bot directly on Telegram.
Top comments (9)
I like how you included the inventory skew rules and taker-fee buffer. Balancing passive spread capture with rebate maximization is tricky, but your method seems robust. Have you found any markets where it underperforms consistently?
Yes, This is strange in Polymarket trading 5 min crypto markets and bot is making profit everyday.
If you want, i can show that running bot live with making profit.
Wonderful. I’m excited to try the Telegram trial bot. Seeing the midpoint strategy in action will help understand how tight spreads translate into real rewards.
I will ping you in Telegram, Check DM, let's connect.
Very well structured explanation. Using the midpoint as the anchor with a fee-aware spread is a clean approach for maintaining maker status while capturing rebates and rewards.
I used that telegram bot as trial, and i get good result.
Thanks
Appreciate the feedback. The strategy is focused on strict maker-side liquidity provision with fee-adjusted spreads and dynamic inventory control.
Still refining it as Polymarket markets and reward mechanisms evolve.
I will look around your other article. Maybe they give me some good info about polymarket trading.
The bot is now fully deployed and consistently profitable.
I’d really appreciate any feedback from experienced traders or builders—whether on strategy design, execution, or risk management. Always open to improvements and discussion.
The modular strategy system is great. Developers could easily plug in new Polymarket trading strategies like market making or volatility models.
Thank you! That’s exactly what we aimed for with the modular design — making it easy for developers to integrate new strategies like market making or volatility models.
I’d love to hear if you have any ideas or strategies you think would be interesting to try.