Overview
Prediction markets aggregate crowd forecasts into real-time probability signals. The challenge is that extracting actionable intelligence requires scanning hundreds of markets, researching each one, predicting probabilities, sizing risk, and reviewing outcomes, all in a structured, automated workflow.
Agent Pipeline
I built a 5-agent system where each agent handles one stage of the pipeline:
ScanAgent fetches markets from all four platforms and scores them by liquidity, volume, and time-to-resolution to surface the most actionable candidates each cycle.
ResearchAgent extracts keywords, pulls relevant news and Reddit posts, applies sentiment analysis, and generates a GPT-powered research summary for each market.
PredictionAgent runs a 3-layer prediction stack: a rule-based adjustment anchored to market price, a GPT-4o-mini superforecasting prompt, and an XGBoost calibration model trained on resolved outcomes. The three outputs are blended dynamically based on LLM confidence and historical sample size.
RiskAgent applies a 3-gate filter (minimum confidence, edge, and expected value thresholds) and sizes positions using dynamic Kelly criterion fractions tied to confidence tiers, capped at a percentage of market liquidity.
ReviewAgent detects expired markets, fetches actual outcomes via the Polymarket Gamma API, computes PnL, runs LLM failure analysis across 7 error tags, and triggers automatic ML model retraining.
Real-Time Monitoring
A persistent WebSocket connection to Polymarket subscribes to 50-market batches and detects price jumps above 3%, triggering immediate re-analysis for the affected market. Six scheduled jobs handle scan, full pipeline, fast pipeline, ultra-fast pipeline, review, and arbitrage scanning at different intervals.
Arbitrage and Backtesting
A cross-platform arbitrage detector uses Jaccard word-overlap title matching to find the same market listed on multiple platforms at different prices. A full backtesting engine computes Brier scores, calibration tables, and cumulative PnL curves. Every BUY decision generates an automatic paper trade tracked through resolution.