How to Farm LP Rewards on Polymarket

How does it work?

Polymarket pays you USDC every day for placing resting limit orders that add liquidity to prediction markets. You’re not trying to predict outcomes directly. Instead, you quote prices and earn rewards for providing liquidity — though fills can still create directional exposure.

Overview

• The closer your orders are to the midpoint, the more you earn.
• Rewards depend on how competitive your orders are compared to others in the book — both in price and size.
• The more competitive your limit orders, the more you can make.
• You get paid daily based on how much liquidity your orders add to the market. You can use our rewards page to check your current earnings for the day, which markets have rewards, and how much.

• Rewards are paid daily, with a minimum payout of $1.

The total rewards, max spread, and minimum shares required to earn rewards vary by market. You can view the rewards for a given market in its Order Book.

• On the Polymarket / PolyScalping order book, you can hover over the Rewards text to see the total rewards available for each market.
• The blue highlighted lines correspond to the max spread—meaning the farthest distance your limit order can be from the midpoint of the market and still earn rewards.
• In the example below, the market midpoint is 33c and the max reward spread is ±3c. This means that any resting limit order placed between 30c and 36c qualifies for LP rewards. If the midpoint is < $0.10, you need to have orders on both sides to qualify.

Earning Rewards

You can use our LP Rewards Dashboard to check your current earnings.

If you’d like to delve into the exact formulas used to calculate your LP rewards, you can find them in the Polymarket documentation.

A few things determine how much you earn:

Order size matters, but only linearly. Distance to the midpoint matters much more, since rewards drop off aggressively as you move away from fair value. Time in the book also matters—orders that stay active longer accumulate more rewards.

Bigger reward pools usually attract more competition, so higher rewards don’t always mean higher profitability.

The closer your orders are to the midpoint, the more rewards you earn—but the more likely you are to get filled. Once filled, you’re no longer just farming rewards. You now hold shares and take directional risk on the market.

LP rewards are highly competitive. If multiple market makers quote near the midpoint, rewards get split between them.

Now that you know how LP farming works on Polymarket, we can discuss how to make money from it.

The essence of LP farming on Polymarket

Your farming returns must exceed the losses from filled toxic orders.

Later in this article, we’ll discuss how to increase profitability and reduce the likelihood of your limit orders getting filled.

What are some LP farming strategies?

Before discussing strategies, let’s talk about what you should avoid.

• Farm on markets that are nearing completion

As markets approach resolution, liquidity often disappears quickly. If your orders get filled, exiting the position can become difficult.

• Highly volatile markets

There’s a high chance your order will be filled, and you won’t be able to sell at (or above) break-even. Live sports and Up or Down markets often offer huge reward pools, but in most cases the volatility makes them not worth farming.

I would identify two main strategies for LP farming: aggressive and passive farming.

Passive LP farming:

The goal of passive LP farming is to farm rewards in stable markets with strong liquidity and low trading volume, where fills are less likely.

Pros of this strategy:

• There is a lower chance that your limit orders will be filled, which means a lower risk of losses.
• Requires significantly less active management.

Cons of this strategy:

• Lower overall profitability compared to aggressive farming.
• Rewards are often heavily diluted by competition.

Passive LP farming sacrifices upside in exchange for greater stability and fewer adverse fills.

This strategy works best with sporting markets that are about to begin. Before the match starts, prices on these markets hardly move at all, which means there’s very little chance your limit orders will be filled.

Sports markets also feature Maker Rebate, which can partially offset losses when your orders get filled. We’ll explain how to earn money with Maker Rebate in our upcoming articles.

Example Passive LP farming:

This is a typical example of a passive LP farming market. Despite having more than $1 million in liquidity, recent trading activity has been relatively low. Since the match is still two weeks away, volatility is likely to remain limited in the near term.

Even if your limit orders get filled, the deep liquidity in the order book should make it relatively easy to exit the position with minimal losses.

Aggressive LP farming:

Aggressive LP farming focuses on markets with low competition (low liquidity), where a small amount of capital can capture a large share of the reward pool.

Pros of this strategy:

• Much higher reward share per dollar deployed.
• Can be profitable even with relatively small capital.

Cons of this strategy:

• The risk of losses is higher.
• Requires constant monitoring.
• Requires more careful market selection.

The most important thing about this strategy is finding the right market. We’ll explain how to do this later.

In April, Polymarket had many markets in the Sport category (such as tennis markets) that had virtually no trading volume and liquidity, but did offer LP rewards. In some cases, as little as $250 to $1,000 in capital was enough to capture a significant percentage of the reward pool.

Even if someone fills your limit order, it’s often done slowly and in small increments, so you’ll have time to adjust or cancel your limit order.

Many aggressive LP strategies are built around temporary inefficiencies in specific markets.

One example is farming during breaks in live sports markets.

During halftime or timeouts, prices often remain temporarily stable while LP rewards stay active. Usually, competition in the order book is low at such times, while rewards are actually higher, allowing aggressive LP farmers to capture a larger share of rewards. These opportunities usually last only a few minutes.

Aggressive LP farming requires constant monitoring, fast reactions, and active quote management.

Example Aggressive LP farming:

This market has extremely low trading activity and very thin liquidity, with less than $200 in reported volume. Because competition in the order book is minimal, even a relatively small amount of capital can capture a large share of the LP reward pool.

How to Find Markets for Farming LP Rewards

Not every Polymarket market offers LP rewards.

You can browse active LP reward markets directly on this Polymarket page or this PolyScalping page. These pages allow you to sort markets by reward size, minimum share requirements, category, and other metrics.

But how do you choose the right market for farming?

You can manually filter markets based on your strategy and risk tolerance.

However, aggressive LP opportunities change quickly, and manually scanning hundreds of markets can become inefficient.

That is why the PolyScalping team developed MarketScan, a tool designed to quickly identify LP farming opportunities.

Below is a simple example of how LP farmers can search for opportunities using MarketScan:

1. Open the Market Scanner: https://polyscalping.org/scanner
2. Set your preferences based on your strategy.

For passive LP farming, prioritize stable markets with high liquidity and relatively low trading activity. Here is an example of MarkerScanner settings for finding such markers:

For aggressive LP farming, look for markets with low competition, active rewards, and weak existing liquidity. Here is an example of MarkerScanner settings for finding such markers:

We've created a special preset specifically for LP farming. This preset helps you quickly filter markets where LP rewards may be easier to capture.

What to look for when selecting LP farming markets:

Timing

Timing matters significantly in sports market farming.

Trading activity usually increases sharply shortly before a match begins, which often leads to higher volatility and a greater risk of getting filled. Because of this, LP farming generally works better before the market becomes highly active.

Once a sports market goes live, volatility usually increases sharply, making LP farming significantly riskier.

Price behavior

Before farming a market, study recent price behavior. Markets with sharp price swings are generally riskier for LP farming.

Order book

Analyze the order book carefully.

Large resting orders can provide cover for passive LP positions, while deeper liquidity makes it easier to exit filled positions with smaller losses.

Market participants

Monitor recent trading activity in the market, as well as the behavior of larger holders.

If there have been many large purchases in the market recently, this increases the likelihood that your limit orders will be filled.

Large holders can also create hidden risk. If they decide to exit using market orders, nearby liquidity can get swept quickly, causing your limit orders to be filled.

Farming Tips

• Place limit orders across multiple markets simultaneously. Since your capital only gets used once an order is filled, the same liquidity can farm rewards across many markets at the same time.
• Use notification bots that alert you when your orders get filled (for example, Kreo).
• Avoid farming during major news events or key moments in live markets, where volatility can spike instantly.

Managing Filled Orders

What should you do after your limit order gets filled? The answer depends on the type of market and the timing of the fill.

If you are farming passively, fills will usually happen in relatively liquid markets, which makes exiting the position much easier. In many cases, you can exit the position by reposting your shares slightly above your entry price, allowing you to lock in a small profit. On some markets, Maker Rebates can further offset trading costs.

However, if liquidity starts disappearing or if a sports market is about to go live, risk can increase very quickly. In such situations, it is often better to reduce exposure immediately rather than continue holding the position.

Most of the time, exiting early will only cost you trading fees or a small loss, while helping preserve your capital and avoid larger downside risk.

If you’re aggressively farming on markets with limited liquidity, it’s usually best to exit the position immediately near your entry price, if possible.

You’ll lose a little on commissions, but with aggressive farming, you’ll be able to quickly recoup those losses through new limit orders. Since aggressive LP farming often uses smaller amounts of capital, the absolute trading fees are usually much lower as well.

You should only avoid selling at market if order book liquidity is too thin, making the exit excessively expensive.

If you are farming on live sports markets and your order gets filled, it is usually best to sell your position quickly.

The same applies to partial fills. If only a small portion of your order gets filled (for example, 5–20%), it is often better to immediately sell those shares, accept a small loss on fees, place new limit orders at safer prices, and continue farming.

The relationship between LP Rewards and $POLY

Polymarket announced some time ago that it would be launching its own token, $POLY, as well as an airdrop.

Because of this, many assume that users currently farming LP rewards may become eligible for the airdrop.

There is no official information on this yet, so this remains speculation. However, there are several reasons why this assumption may be correct:

1. Liquidity is one of the biggest challenges in prediction markets, and LPs help solve this issue. They are a critical part of the ecosystem.
2. The Polymarket team constantly incentivizes LP providers, allocating millions of dollars to support it.
3. The number of users who have earned at least $1 in LP rewards has already surpassed 100,000, while only around 30,000 wallets have earned more than $10.

Given these factors, there is a fairly high probability that LP farmers could become eligible for a future Polymarket airdrop.

To see how many LP rewards you've earned and where you rank, check the leaderboard in the Rewards section.

Guides on how to farm LP from top Polymarket traders

1. muddyrc (PnL: $21k). Article: Mastering Polymarket LP Rewards: Spread, Penalties, and Yield https://x.com/muddyrc/status/2044462166107938966
2. Awestin.eth (earned $3,500 on LP) Video guide on how to farm LP: https://x.com/austiinxbt/status/2035785283707322624
3. Didi (PnL: $100k+) Polymarket strategy to earn LP rewards: https://x.com/DidiTrading/status/2021253954076606852
4. Awestin.eth (earned $3,500 on LP) Daily up/down markets are Polymarket LP alpha: https://x.com/austiinxbt/status/2064539891791217138?s=20