Configuration

Hydra is configured via a YAML file. This file controls the bot’s operation mode, risk parameters, market discovery logic, and strategy settings.

Complete Example

Below is a complete config.yaml example showcasing all available configuration blocks.

mode: paper
ipc:
  host: 127.0.0.1
  port: 3000
persistence:
  outDir: ./data
  snapshotIntervalMs: 1000
risk:
  staleness:
    polymarketWsMs: 5000
    binanceWsMs: 2000
    chainlinkMs: 60000
  reconciliation:
    enabled: true
    intervalMs: 60000
  limits:
    maxDrawdownPercent: 10
    maxPositionSizeUSDC: 500
    maxOrdersPerMinute: 30
simulation:
  feeModel:
    maker: 0.0001
    taker: 0.0002
  latencyMs: 150
  fillProbability: 0.95
markets:
  coins:
    - Bitcoin
    - Ethereum
    - Solana
  durations:
    - 5m
    - 15m
    - 1h
  maxMarkets: 5
  scoring:
    minVolume24hr: 1000
    minLiquidity: 500
    maxSpread: 0.10
    maxStrikeDistancePercent: 0.10
    strikeProximityWeight: 0.35
    volumeWeight: 0.25
    liquidityWeight: 0.20
    spreadWeight: 0.10
    edgeWeight: 0.10
strategies:
  enabled:
    - latency_arb
  latency_arb:
    edgeThreshold: 0.02
    maxPositionSize: 50
    cooldownMs: 5000
    volatilityWindowMs: 300000
    minVolatility: 0.1
replay:
  input: ./recordings/session_20250110.bin

Core Settings

Key	Type	Description
mode	String	Execution mode: replay (historical data), paper (live data, simulated execution), or live (real trading).
ipc	Object	Connection settings for the Terminal User Interface (TUI).
persistence	Object	Settings for saving logs, snapshots, and performance data.

Risk Management

The risk section defines safety thresholds to protect capital and ensure data integrity.

Staleness

Defines the maximum allowed age of price data before it is considered “stale” and trading is halted.

• polymarketWsMs: Max latency for Polymarket WebSocket updates.
• binanceWsMs: Max latency for Binance price updates.
• chainlinkMs: Max age for Chainlink oracle data.

Reconciliation

Periodically verifies that local state matches the exchange state.

• enabled: Whether to perform reconciliation.
• intervalMs: Frequency of reconciliation checks.

Limits

Hard bounds on trading activity.

• maxDrawdownPercent: Max allowed portfolio drawdown before emergency stop.
• maxPositionSizeUSDC: Max size for a single position in USDC.
• maxOrdersPerMinute: Rate limiting for order placement.

Simulation

Configure the simulation engine used in paper and replay modes.

• feeModel: Simulated trading fees for maker and taker orders.
• latencyMs: Simulated network latency added to every action.
• fillProbability: The likelihood (0.0 to 1.0) that a limit order is filled when price touches the limit.

Market Discovery & Scoring

The bot automatically discovers and ranks markets based on specific criteria. This allows it to focus on the most profitable or liquid opportunities.

Filtering

• coins: List of underlying assets to monitor (e.g., Bitcoin, Ethereum).
• durations: Target market durations (e.g., 5m, 1h).
• maxMarkets: Maximum number of concurrent markets to track.

Smart Scoring Config

Markets are scored using a weighted average of several factors. Higher scores receive higher priority for tracking and strategy execution.

Parameter	Default	Description
minVolume24hr	100	Minimum 24-hour volume required to consider a market.
minLiquidity	100	Minimum order book liquidity.
maxSpread	0.15	Maximum bid-ask spread (as a decimal) allowed.
maxStrikeDistancePercent	0.15	Maximum distance from current price to strike price.
strikeProximityWeight	0.35	Weight given to how close the current price is to the strike.
volumeWeight	0.25	Weight given to 24h trading volume.
liquidityWeight	0.20	Weight given to market liquidity.
spreadWeight	0.10	Weight given to tight spreads (lower spread = higher score).
edgeWeight	0.10	Weight given to detected price discrepancies.

Strategy Configuration

The strategies section manages which logic modules are active and their specific parameters.

Latency Arbitrage

Configures the latency_arb strategy, which exploits price delays between Polymarket and faster venues like Binance.

• edgeThreshold: Minimum price discrepancy required to trigger a trade.
• maxPositionSize: Maximum number of contracts per trade.
• cooldownMs: Time to wait after a trade before looking for new opportunities.
• volatilityWindowMs: Time window for calculating asset volatility.
• minVolatility: Minimum volatility required to enable the strategy.

Replay Settings

When mode is set to replay, use this section to specify the source data.

• input: File path to the binary recording of market data.