If you're dipping your toes into prediction markets, Polymarket is one of those platforms that's been buzzing in the crypto space. It's where people bet on real-world events using crypto, and it turns out, providing liquidity there can be a smart way to earn some yields— if you know where to look. Recently, Terry Lee (@terrytakes101) shared his experiments with just that, building on an open-source tool from defiance (@defiance_cr). Let's break it down in simple terms and see what this means for blockchain enthusiasts hunting for the next edge.

What Are Prediction Markets and Why Polymarket?

Prediction markets let users trade on outcomes of events, like "Will this company beat its earnings?" or "Who wins the Nobel Peace Prize?" Prices reflect crowd wisdom— if something trades at 70 cents, the market thinks there's a 70% chance it'll happen. Polymarket runs on blockchain, using USDC for bets, making it accessible for crypto users.

Liquidity providing (LP) here means placing buy and sell orders on both sides of a market. You earn rewards from Polymarket for keeping the order book tight, which helps trading flow smoothly. It's similar to being a market maker in traditional finance, but with crypto twists like impermanent loss (IL), where price swings can eat into your profits.

Terry's post highlights how rewards have dipped over time—no more easy money—but scanning daily still uncovers gems. He forked defiance's repo to adapt a script that hunts for these ops.

Key Insights from Terry's Scan

Terry's adapted script pulls data on events with high rewards relative to risk. The sweet spot? Events where the "gm_reward_per_100" (gross market reward per $100) tops 15. By LP-ing $100 on both sides near the midpoint price (with a max 3.5% spread), you could net around $35 a day—that's a juicy 35% yield. But watch out: high volatility can lead to IL, wiping out gains if prices swing wildly.

Looking at the screenshot he shared, rewards cluster around timely events:

• Quarterly earnings beats for companies like Penguin Solutions (PENG), U.S. Bancorp (USB), or Helen of Troy (HELE).
• Special bets, such as the International Court of Justice (UNT) winning the Nobel Peace Prize in 2025.

These are often short-term plays with quick resolutions, which amps up the reward concentration. The script also filters for low volatility (vol_sum under 20) to avoid those illiquid swings that could torpedo your LP position.

Tools and How to Get Started

The magic starts with defiance's open-source market-making bot, PolyMaker, available on GitHub. It's designed to automate placing and canceling orders on Polymarket's central limit order book (CLOB). Terry forked this and tweaked it for scanning—focusing on data extraction rather than full auto-MM for now. He mentions manual LP while he learns more, which is a solid approach for beginners to avoid automation pitfalls.

For more on automated market making, check out Polymarket's guide here. And if you're into data dives, defiance also open-sourced a Polymarket data scraper at this repo, which pulls trades and more via their Goldsky integration.

Risks and Tips for Meme Token Fans

While this isn't directly about meme tokens, prediction markets often feature crypto-related events, including meme coin price predictions or hype cycles. The skills here—scanning for yields, managing IL—translate well to DeFi plays in the meme space, like providing liquidity on DEXs for volatile tokens.

Remember, these are short-term ops; you'll need to rotate or automate to keep the gains coming. Always DYOR (do your own research) and note this is NFA (not financial advice). Volatility is your friend for rewards but your enemy for losses.

If you're building your knowledge base on blockchain tools, posts like Terry's are gold. Follow him and defiance for more insights, and head over to Polymarket to explore. Who knows? Your next high-yield play might be betting on the next big meme event.

For the original post, see it here.