Everyone Is Talking About AI Trading Bots. We Actually Built One. Here's What Happened.

The authors built an AI trading bot for Polymarket, initially targeting pricing arbitrage between Polymarket and Binance but pivoting to market-making after opportunities disappeared in January 2025. Despite correct quoting and fills on both sides, the bot lost money in paper trading due to the complexity of order and position management and adverse selection dynamics unique to prediction markets. The entire codebase was built using Claude as a coding partner, and the team is open sourcing the full system including the postmortem of its failure.