Two Core Arbitrage Types Identified 1. Market Rebalancing Arbitrage (Intra-Market) Occurs...
Study found $40M arbitrage on Polymarket via market rebalancing ($29M) and combinatorial gaps; top 10 traders captured 20.5% with systematic bots. Market inefficiency by design rewards builders with robust detection, optimization, and sub-second execution—core infrastructure differentiator in DeFi trading.
Two Core Arbitrage Types Identified
1. Market Rebalancing Arbitrage (Intra-Market)
Occurs when the sum of ask prices for mutually exclusive outcomes in the same market/condition deviates from $1.00.
Buy-side rebalancing: YES + NO asks sum < $1.00 → Buy both for guaranteed $1.00 payout.
Sell-side rebalancing: YES + NO bids sum > $1.00 → Sell both for immediate profit.
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