🤖 Polymarket-Kalshi BTC Arbitrage Bot

Real-time arbitrage detection for the Bitcoin 1-Hour Price market between Polymarket and Kalshi.

🚀 Overview

The Polymarket-Kalshi BTC Arbitrage Bot is a powerful tool designed to monitor and identify risk-free arbitrage opportunities in the Bitcoin 1-Hour Price market between two of the world's leading prediction markets: Polymarket and Kalshi.

By leveraging real-time data from Polymarket's CLOB (Central Limit Order Book) and Kalshi's API, this bot calculates the combined cost of opposing positions (e.g., "Yes" on Kalshi + "Down" on Polymarket) for the same hourly expiration. If the total cost is less than $1.00, a risk-free profit opportunity exists.

This project includes:

• Python Backend: Fast and efficient data fetching and arbitrage logic using FastAPI.
• Next.js Dashboard: A beautiful, real-time UI built with shadcn/ui to visualize market data and opportunities.

📚 Learn the Theory: Read our detailed Arbitrage Thesis to understand the mathematics behind risk-free profits in binary option markets.

✨ Features

• Real-Time Monitoring: Fetches live prices every second.
• Smart Matching: Automatically matches Polymarket events with their corresponding Kalshi markets.
• Arbitrage Detection: Instantly identifies "risk-free" trades where the total cost < $1.00.
• Visual Dashboard:
  • Live Updates: See prices change in real-time.
  • Best Opportunity Highlight: Prominently displays the most profitable trade.
  • Visual Cost Bars: Quickly assess the cost breakdown of each strategy.
• Comprehensive Analysis: Checks multiple strategies (Poly Down + Kalshi Yes, Poly Up + Kalshi No).

🛠️ Tech Stack

• Backend: Python, FastAPI, Uvicorn, Requests
• Frontend: TypeScript, Next.js, Tailwind CSS, shadcn/ui, Lucide React

📦 Installation

Prerequisites

• Python 3.9+
• Node.js 18+
• npm or yarn

1. Clone the Repository

git clone https://github.com/CarlosIbCu/polymarket-kalshi-btc-arbitrage-bot.git
cd polymarket-kalshi-btc-arbitrage-bot

2. Setup Backend

Navigate to the backend directory and install dependencies:

cd backend
pip install -r requirements.txt

3. Setup Frontend

Navigate to the frontend directory and install dependencies:

cd ../frontend
npm install

🚀 Usage

To run the full application, you need to start both the backend and frontend servers.

1. Start Backend API

In the backend directory:

python3 api.py

The API will start at http://localhost:8000.

2. Start Frontend Dashboard

In the frontend directory:

npm run dev

The dashboard will be available at http://localhost:3000.

📊 How It Works

1. Data Ingestion: The bot fetches the latest "Bitcoin Up or Down" hourly market from Polymarket and searches for the corresponding markets on Kalshi.
2. Normalization: Prices are normalized to a standard probability format (0.00 - 1.00).
3. Comparison: The bot compares the "Price to Beat" (Strike Price) on Polymarket with Kalshi's strike prices.
   • If Poly Strike > Kalshi Strike: Checks Poly Down + Kalshi Yes.
   • If Poly Strike < Kalshi Strike: Checks Poly Up + Kalshi No.
4. Calculation: It sums the cost of the two legs. If Total Cost < $1.00, it's an arbitrage opportunity!

🤝 Contributing

Contributions are welcome! Please feel free to submit a Pull Request.

1. Fork the project
2. Create your feature branch (git checkout -b feature/AmazingFeature)
3. Commit your changes (git commit -m 'Add some AmazingFeature')
4. Push to the branch (git push origin feature/AmazingFeature)
5. Open a Pull Request

📝 License

Distributed under the MIT License. See LICENSE for more information.