Now is the perfect time to engage with Polymarket (including an exclusive tutorial guide)

Original | Odaily Planet Daily (@OdailyChina)

Author | Azuma (@azuma_eth)

Earlier this year, Odaily Planet Daily translated an article by data analyst arise titled “Data Modeling: How to Improve Interaction Quality on Polymarket.”

The core logic of the article is that, considering about 80% of users receive at least $1 in liquidity (LP) subsidies from Polymarket, when everyone is aggressively trading, a more efficient interaction strategy is actually to find ways to accumulate LP rewards.

“LP rewards” refer to the real cash subsidies Polymarket distributes to improve the platform’s liquidity for certain prediction markets. All reward details can be viewed in real-time on the official Rewards (https://polymarket.com/rewards) page.

Users need to first select the event for which they want a subsidy, then place an order within the specified price spread (Max Spread) with at least the minimum shares (Min Shares). This will automatically accumulate LP rewards, with order prices close to the market price—the higher the efficiency, the closer to the current price. LP rewards are distributed daily at 8:00 AM, but only rewards above $1 are issued.

Although the rules for earning LP rewards are not complicated, because market making in prediction markets is inherently more difficult (see “Only 10% of prediction markets will survive until the end of the year, and it’s no exaggeration”), and since daily rewards have a minimum threshold of $1, many ordinary users with limited funds find it difficult to accumulate rewards, and may even face losses due to inventory risks.

However, right now, Polymarket offers a great opportunity — with NCAA “March Madness” approaching, Polymarket has announced a $2 million LP subsidy for related events.

To date, Polymarket has distributed a total of $13 million in LP subsidies for all subsidized events. This time, over $2 million in subsidies will be concentrated over the next month across 63 specific matches — directly increasing the subsidy for individual events and creating an excellent opportunity for ordinary users.

Next, Odaily Planet Daily will guide you step-by-step through the market-making process for NCAA-related events, and briefly highlight a few points I think are worth noting.

First, open the Rewards page on Polymarket, click “Reward,” and then sort all events by subsidy amount. It’s clear that the events with the largest subsidies on Polymarket are currently NCAA “March Madness” games. (I’ve been providing liquidity on Polymarket for the past few months and have never seen such high subsidy levels.)

The most important step next is choosing the pool. It’s worth noting that on the Rewards page, there’s a COMP (Competitive) column indicating the current competition level for providing liquidity on that event. Theoretically, the greener it is, the less competition there is, but in practice, professional market makers have largely leveled the playing field, so most are now “three yellow squares,” indicating moderate competition.

I recommend choosing events with later start times. For example, I placed funds on the game between the University of Iowa and the University of Houston, scheduled for March 19 (Eastern Time), which is March 20 in Beijing.

The reason for choosing later start times is that the trading volume for a single sports event on Polymarket usually peaks just before the game begins, and now that subsidies are being allocated, lower trading volume generally means less volatility. The chart below clearly shows the probability fluctuations after the game was listed on Polymarket — and yes, it’s a straight line!

Minimal fluctuations mean users can temporarily avoid the major risk of inventory imbalance. In simple terms, you don’t need to worry about sudden price swings causing your orders to be eaten, or the market price drifting unfavorably.

Once you’ve chosen your pool (it doesn’t have to be this one; I entered my funds in the morning, so you can look at the time and choose later ones), it’s time to add liquidity. Polymarket’s minimum requirement for all NCAA games is 1,000 shares, with a maximum spread of ±1¢.

Compared to placing buy orders, I recommend using Polymarket’s Split feature to divide the minimum $1000 (the minimum requirement) into equal bilateral shares (which can be reversed with the Merge function to recreate $1000), then place sell orders on both sides.

The specific order points depend on your risk preferences. The closer to the market price, the higher the efficiency of earning LP rewards, but to manage inventory risk, I prefer placing orders at the “second best” price, and monitor price movements carefully to avoid being eaten — if that happens, your order amount may no longer meet the requirements, and you’ll need to consider how to handle the other side’s shares.

Finally, regarding order cancellation timing, it’s recommended to cancel your orders about a day before the game starts, then look for later matches if you want to continue. You can repeat the process.

I’ll share some data: I placed my orders around 10:00 AM. During the process, the probability for that game didn’t fluctuate at all. Although you should keep an eye on it, I didn’t do anything special. By 5:00 PM, I had earned $4.31 in LP rewards (which will be distributed tomorrow).

The earnings are small, but the key point is enriching your interaction with Polymarket. Compared to a few days ago, when you might have had to compete with the market under lower subsidies, under current subsidy levels and event volatility, this operation is now basically “mindless.”

Finally, a quick plug: if you’re interested in prediction markets, join our Telegram chat channel for discussions: https://t.me/OdailySeer