AI Guided Market Making Agent

Automated market making on Manifest DEX using Solana Agent Kit

Build an intelligent market making bot for Manifest DEX using Solana Agent Kit. This implementation provides automated quote management with randomization to prevent front-running.

Core Features

1. Automated Market Making

   • Two-sided quoting

   • Configurable parameters

   • Automatic quote refreshing

   • Random pricing model

2. Trading Strategy

   • Configurable depth

   • Multiple quote levels

   • Balance management

   • Risk controls

​Quick Start

​1. Setup

# Clone repository
npm install -g degit
degit sendaifun/solana-agent-kit/tree/main/examples/market-making-agent market-maker
cd market-maker

# Install dependencies
pnpm install

# Configure environment
cp .env.example .env.local

​2. Configuration Parameters

interface MarketMakerConfig {
  marketId: string;          // Manifest market ID
  baseToken: string;         // Base token symbol
  quoteToken: string;        // Quote token symbol
  quoteParams: {
    number: number;          // Quotes per side
    minDepth: number;        // Min price distance
    maxDepth: number;        // Max price distance
  };
  allowance: {
    base: number;           // Base token allowance
    quote: number;          // Quote token allowance
  };
  intervalSeconds: number;   // Update interval
}

​Example Configuration

{
  "marketId": "2Uj8277fkaVBtTU6Wp2GPRbQC86SkSdgQ2mp1Q5N2LHc",
  "baseToken": "SEND",
  "quoteToken": "USDC",
  "quoteParams": {
    "number": 4,
    "minDepth": 0.1,
    "maxDepth": 2
  },
  "allowance": {
    "base": 2,
    "quote": 3
  },
  "intervalSeconds": 20
}

​Implementation Details

​Quote Generation

function generateQuotes(midPrice: number, params: QuoteParams): Quote[] {
  const quotes = [];
  for (let i = 0; i < params.number; i++) {
    // Add randomization to prevent front-running
    const randomFactor = 1 + (Math.random() - 0.5) * 0.01;
    const depth = params.minDepth + 
      (params.maxDepth - params.minDepth) * (i / params.number);
    
    quotes.push({
      price: midPrice * (1 + depth) * randomFactor,
      size: calculateSize(depth)
    });
  }
  return quotes;
}

​Market Making Loop

async function startMarketMaking(config: MarketMakerConfig) {
  while (true) {
    try {
      // 1. Get current market state
      const marketState = await getMarketState(config.marketId);
      
      // 2. Generate quotes
      const quotes = generateQuotes(marketState.midPrice, config.quoteParams);
      
      // 3. Place orders
      await placeOrders(quotes);
      
      // 4. Wait for interval
      await sleep(config.intervalSeconds * 1000);
    } catch (error) {
      console.error('Market making error:', error);
    }
  }
}

​Trading Parameters

​Quote Depth

• Minimum: Distance from mid price for closest quote

• Maximum: Distance from mid price for furthest quote

• Number: Quotes to place on each side

​Size Parameters

• Base Allowance: Maximum base token usage

• Quote Allowance: Maximum quote token usage

• Size Distribution: How size scales with depth

​Risk Management

1. Balance Monitoring

   • Track token usage

   • Enforce allowance limits

   • Monitor exposure

   • Balance reallocation

2. Quote Management

   • Price sanity checks

   • Size limits

   • Spread controls

   • Update frequency

3. Error Handling

   • Transaction failures

   • Network issues

   • Market conditions

   • Balance issues

​Example Usage

​Start Market Making

// Initialize configuration
const config = {
  marketId: "your-market-id",
  baseToken: "SEND",
  quoteToken: "USDC",
  quoteParams: {
    number: 4,
    minDepth: 0.1,
    maxDepth: 2
  },
  allowance: {
    base: 2,
    quote: 3
  },
  intervalSeconds: 20
};

// Start market making
await startMarketMaking(config);

​Common Issues

1. Market Conditions

   • Insufficient liquidity

   • High volatility

   • Wide spreads

   • Price impact

2. Technical Issues

   • Network latency

   • Transaction failures

   • API limits

   • Balance sync

3. Configuration

   • Parameter tuning

   • Quote spacing

   • Size allocation

   • Update frequency

​Performance Optimization

1. Quote Management

   • Batch updates

   • Cancel strategies

   • Order tracking

   • State management

2. Network Optimization

   • RPC endpoint selection

   • Retry strategies

   • Confirmation levels

   • Transaction priority

3. Resource Usage

   • Memory management

   • CPU utilization

   • Network bandwidth

   • Storage efficiency

​Monitoring

​Metrics to Track

• Quote placement success rate

• Fill rates per level

• Token utilization

• P&L tracking

​Logging

interface MarketMakingLog {
  timestamp: number;
  midPrice: number;
  spreads: number[];
  balances: {
    base: number;
    quote: number;
  };
  activeQuotes: number;
}

​Development Tips

1. Testing

   • Use devnet first

   • Test with small sizes

   • Monitor closely

   • Log everything

2. Deployment

   • Secure key management

   • Environment setup

   • Monitoring setup

   • Backup systems

3. Maintenance

   • Regular updates

   • Parameter tuning

   • Performance analysis

   • Risk assessment

​Resources

• Manifest DEX Documentation
• Solana Agent Kit GitHub
• Market Making Strategies
• Risk Management Guide

​Support

For support and questions:

• GitHub issues

• Documentation

• Community channels

• Development team