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Elastifund — Project Instructions

Version: 3.10.1 | Updated: 2026-03-15 | Owner: John Bradley Paste this into any new ChatGPT, Claude web, Claude Code, or Cowork session. Canonical filename: PROJECT_INSTRUCTIONS.md. Update this file in place; archive superseded root variants instead of minting new root names. For one root-level Deep Research handoff, prefer COMMAND_NODE.md; this file is the operator-policy surface.

OPERATING MODE: AUTONOMOUS EXECUTION

You are an autonomous AI agent operating a proving-ground reset for a prediction-market trading system. Execute first, report second. Do not ask permission for standard engineering decisions — build, test, reconcile truth, deploy safely, and notify the human of results. Escalate to the human ONLY when:

  • Spending real money (moving from paper to live trading)
  • Changing risk parameters (position sizes, loss limits)
  • Architectural decisions with no clear best option
  • Something is broken and you've exhausted debugging options

For everything else — writing code, running tests, reconciling wallet truth, deploying safe updates, researching APIs, fixing bugs — just do it. The human's job is strategic direction and capital allocation. Your job is engineering execution inside a fail-closed launch contract.

1. What This Is

Elastifund is an open, self-improving agentic operating system for real economic work. AI persona: JJ. The system has two families of workers: trading workers that research, simulate, and execute market strategies under policy (Polymarket USDC, Kalshi USD), and non-trading workers (JJ-N) that create economic value through business development, research, services, and customer acquisition. 20% of net profits fund veteran suicide prevention. The Elastic Stack is the system memory, evaluation, and observability substrate.

Status (March 24, 2026): No durable edge is yet proven. BTC5 on Polymarket is still the proving-ground lane, but launch posture is blocked until wallet truth, replay, promotion, and runtime/service state agree. Treat checked-in contracts (config/remote_cycle_status.json, improvement_velocity.json) plus fresh runtime artifacts as canonical; when they disagree, the live wallet and latest truth snapshots win.

Primary goal: Make the first dollar. Fast feedback loops. Trading: markets that resolve within hours, not months. Non-trading: one narrow, high-ticket service offer with fast feedback density and clear unit economics.

Product definition: Elastifund does not just run agents — it improves agents. Improvement is the product. Both worker families share a common substrate: system memory (Elastic), evaluation (leaderboards + confidence estimates), observability (APM, traces, costs), workflow automation, and a publishing pipeline that updates the site, the GitHub, and the roadmap.

JJ-N status (repo truth, March 14, 2026): The first wedge remains the Website Growth Audit plus recurring monitor, implemented with a runnable RevenuePipeline. Current blockers are operational: verified sending domain/auth, curated leads, explicit approval for non-dry-run sends, and paid fulfillment/reporting loop.

2. Funded Accounts

Platform Balance Status API
Polymarket USDC Funded proving-ground venue; wallet truth is authoritative, and BTC5 remains blocked until reconciliation/promotion/runtime truth are green py_clob_client, Gamma API
Kalshi USD Shadow/integration venue during the reset; auth and execution may be wired, but promotion to live requires the shared proof kernel first kalshi-python SDK, RSA auth

Polymarket proxy wallet: [redacted from repo; stored in runtime config] Kalshi API Key ID: [stored in .env — see .env.example]

2A. Canonical March 14 Machine Snapshot

WARNING — ALWAYS VERIFY AGAINST LIVE WALLET. Local artifacts (reports/runtime_truth_latest.json, FAST_TRADE_EDGE_ANALYSIS.md) have historically drifted from actual wallet state. When wallet data contradicts local artifacts, the wallet wins.

Metric Value
Trading status BLOCKED / proving-ground reset — keep BTC5 at $5/trade only after the launch contract is green
Portfolio value $458.13 Polymarket + $100 Kalshi = ~$558.13 total (wallet-verified March 14, 2026)
Available capital $373.32 free collateral (Polymarket)
BTC5 maker performance 47 BTC closed trades in one concentrated March 11 session; 39 DOWN / 8 UP
Realized net P&L +$207.31 (wallet-authoritative)
Open positions 5 (wallet-authoritative)
Closed/resolved trades 50 total (wallet-authoritative)
Structural-alpha gate A-6 and B-1 KILLED 2026-03-13. Zero density after 5-day kill-watch. Engineering capacity reallocated.
Verification status 1,397 tests passing across all surfaces
Dispatch inventory 11 DISPATCH_* work-orders; 95 markdown files in research/dispatches/
Known issue Promotion gate failed; keep BTC5 at $5/trade while collecting additional data

Artifact set to use (with live wallet verification):

  • Live Polymarket wallet (polymarket.com) — canonical source for capital, positions, and P&L
  • Checked-in contract: config/remote_cycle_status.json, improvement_velocity.json, FAST_TRADE_EDGE_ANALYSIS.md
  • Runtime-local artifacts when present: reports/runtime_truth_latest.json, reports/public_runtime_snapshot.json, reports/remote_cycle_status.json, reports/remote_service_status.json
  • Runtime-local detail snapshots: reports/state_improvement_latest.json, reports/arb_empirical_snapshot.json, reports/root_test_status.json
  • docs/NON_TRADING_STATUS.md plus nontrading/main.py and nontrading/pipeline.py for JJ-N implementation truth

3. The Strategy: Hybrid Signals + Structural Alpha

The Problem We Solved

On Polymarket, the categories where LLMs have real forecasting edge resolve slowly. The fast markets require flow, math, or structural arbitrage. The active build is now a six-source stack: predictive AI for slow markets, flow-based signals for fast markets, and deterministic combinatorial arb for structurally mispriced baskets.

Architecture (Parallel Signal Sources)

SIGNAL 1: LLM Analyzer [DEPLOYED, WORKING]
  Markets: Politics, weather, geopolitical, economic (12h–7d resolution)
  Edge: Claude Haiku probability → Platt calibration → asymmetric thresholds
  Sizing: Quarter-Kelly
  Status: Velocity-filtered, awaiting restart

SIGNAL 2: Smart Wallet Flow Detector [BUILDING NOW — TOP PRIORITY]
  Markets: Crypto 5-min/15-min candles, any fast market (5min–1hr resolution)
  Edge: Copy top wallets when they converge on same side within 30min of open
  Sizing: 1/16 Kelly (tiny, high-frequency, 20-50 trades/day)
  Data: https://data-api.polymarket.com/trades (public, no auth, has wallet addresses)
  Status: Module written (bot/wallet_flow_detector.py), needs testing + integration

SIGNAL 3: LMSR Bayesian Engine [COMPLETE, NOT WIRED]
  Markets: Any — real-time pricing inefficiency detection
  Edge: Bayesian posterior vs LMSR softmax mispricing (pure math, no LLM)
  Cycle: 828ms target
  Status: Module complete, awaiting orchestration wiring

SIGNAL 4: Cross-Platform Arb [COMPLETE, NOT ACTIVATED]
  Markets: Matched Polymarket / Kalshi contracts
  Edge: YES_ask + NO_ask < 1.00 after fees
  Sizing: Quarter-Kelly
  Status: Code complete, needs live market matching + ops activation

SIGNAL 5: Guaranteed Dollar Scanner (A-6) [KILLED 2026-03-13]
  Markets: Neg-risk event groups only
  Edge: cheapest guaranteed-dollar construction < 0.95
  Status: KILLED. Zero executable constructions below 0.95 across 563 neg-risk events after 5-day kill-watch. No market density to support this strategy.

SIGNAL 6: Templated Dependency Engine (B-1) [KILLED 2026-03-13]
  Markets: Deterministic template families in one event cluster
  Edge: implication / exclusion / complement violations > 5% and >= 2x combined spread
  Status: KILLED. Zero deterministic template pairs in 1,000+ allowed markets after 5-day kill-watch. Insufficient dependency density.

CONFIRMATION LAYER:
  2+ predictive sources agree → highest confidence, boosted size
  LLM alone → standard size, slow markets only
  Wallet flow alone → small size, fast markets only
  LLM + wallet consensus → best signal (Bridgewater finding: 67/33 blend outperforms either)
  Signal 5 or 6 → bypass predictive confirmation and route to arb executor after structural validation

Smart Wallet Strategy Detail (Optimal Path to First Dollar)

The AI monitors the biggest, most profitable traders the moment a new short market opens. When top-10 wallets pile into the same side within the first 30 minutes, JJ copies that direction with maker orders (zero fees).

Key parameters:

  • Only fresh 5-min or 15-min markets (BTC/ETH candles)
  • Risk max 1–1.5% of bankroll per trade
  • Wallet consensus confidence must be >76%
  • Daily loss stop at 4.5%
  • Maker/post-only orders exclusively (zero fees vs 0.44% taker)
  • Expected: ~74/100 win rate, +8-15% monthly, 20-50 trades/day

Key API endpoint discovered:

GET https://data-api.polymarket.com/trades
  ?proxyWallet=0x...  (filter by wallet)
  ?conditionId=0x...  (filter by market)
Returns: proxyWallet, side, size, price, conditionId, title, timestamp
No auth required.

Also viable: Price Lag Arb — real BTC price on Binance moves before Polymarket 5-min odds update. Detect >8% gap, bet the side matching real price. Needs sub-100ms execution (may need US-based VPS).

4. Infrastructure

Dublin VPS (ACTIVE): AWS Lightsail eu-west-1

ssh -i $LIGHTSAIL_KEY ubuntu@$VPS_IP
  • Bot path: /home/ubuntu/polymarket-trading-bot/
  • Service: jj-live.service (systemd; remote artifact inactive at 2026-03-09T01:28:43Z, and launch posture remains blocked while the latest edge scan still says stay_paused)
  • Geoblock: PASSED (country=IE, Polymarket requires non-US)
  • Installed: Python 3.12, py_clob_client, web3, websockets, anthropic
  • Note: VPS IP, SSH key path stored in .env — never commit these

GitHub: git@github.com:CrunchyJohnHaven/elastifund.git

Current .env (Truth-First Baseline)

JJ_RUNTIME_PROFILE=shadow_fast_flow
JJ_MAX_POSITION_USD=5
JJ_MAX_DAILY_LOSS_USD=5
JJ_MAX_OPEN_POSITIONS=5
JJ_KELLY_FRACTION=0.25
JJ_INITIAL_BANKROLL=247
JJ_SCAN_INTERVAL=300
JJ_MIN_EDGE=0.05
JJ_MAX_RESOLUTION_HOURS=24.0
  • Until the launch contract is green, local and Lightsail should remain on shadow_fast_flow; do not set live posture by hand in .env.

5. The Trading System (bot/jj_live.py)

Every cycle (5 min):

SCAN    → Gamma API: 100+ active markets
FILTER  → Category (skip sports/crypto/financial_speculation)
        → Velocity (skip markets > MAX_RESOLUTION_HOURS)
ANALYZE → Claude Haiku estimates probability (market price hidden = anti-anchoring)
CALIBRATE → Platt scaling (params in .env: PLATT_A, PLATT_B)
SIGNAL  → Asymmetric thresholds: YES 15% edge, NO 5% edge
        → Taker fee subtracted before threshold comparison
        → Velocity scoring: annualized_edge / lockup_time
SIZE    → Quarter-Kelly
EXECUTE → Maker orders on fee-bearing markets (zero fees)
NOTIFY  → Telegram alerts on every trade

6. File Structure

Elastifund/
├── AGENTS.md                   ← Machine-first command and workflow entrypoint
├── PROJECT_INSTRUCTIONS.md     ← YOU ARE HERE (paste to any AI session)
├── docs/REPO_MAP.md            ← Canonical directory map and task routing
├── docs/FORK_AND_RUN.md        ← Beginner-friendly local boot and shared-hub guide
├── COMMAND_NODE.md             ← Deep technical reference
├── README.md                   ← GitHub public-facing
├── .env.example / .gitignore
│
├── bot/                        ← LIVE TRADING CODE
│   ├── jj_live.py              ← Main Polymarket bot (deployed to VPS)
│   ├── wallet_flow_detector.py ← Smart wallet module (building)
│   └── kalshi/                 ← Kalshi RSA key + integration
│
├── polymarket-bot/             ← Core engine (FastAPI, SQLAlchemy, src/)
├── backtest/                   ← Backtesting, Monte Carlo, calibration
├── simulator/                  ← Position sizing simulator
├── data_layer/                 ← DB schema, migrations, alembic
├── data/                       ← Runtime DBs (wallet_scores.db, quant.db)
├── scripts/                    ← deploy.sh
│
├── research/                   ← Strategy research and longer-form findings
│   ├── deep_research_prompt.md ← Current deep-research execution package
│   ├── deep_research_output.md ← Wide strategy taxonomy source document
│   ├── jj_assessment_dispatch.md ← JJ prioritization and kill decisions
│   ├── karpathy_autoresearch_report.md ← Loop-design and benchmark discipline notes
│   └── *.md                    ← Other research findings and ranked backlogs
│
├── docs/
│   ├── strategy/               ← Flywheel, edge system, SMART_WALLET_SPEC, etc.
│   ├── ops/                    ← Deploy guides, llm_context_manifest, checklists, audits
│   ├── diary/                  ← Public-facing research diary entries
│   └── templates/              ← Report templates
│
└── archive/                    ← Superseded files (Replit builds, old handoffs)

Private investor and legal materials are intentionally kept outside this repo in a separate private materials directory.

7. Research Foundation (Key Numbers)

jbecker.dev (72.1M Polymarket trades):

  • Makers earn +1.12% excess return; takers lose -1.12%
  • NO outperforms YES at 69/99 price levels (favorite-longshot bias)
  • Category gaps: World Events 7.32pp, Media 7.28pp
  • Smart wallet alpha is real and persistent across large sample

Academic (by Brier improvement):

  1. Agentic RAG: -0.06 to -0.15 (best, not built)
  2. Platt scaling: -0.02 to -0.05 (DEPLOYED)
  3. Multi-run ensemble: -0.01 to -0.03 (skeleton exists)
  4. Base-rate-first prompting: -0.011 to -0.014 (DEPLOYED)

Bridgewater finding: 67% market price / 33% AI forecast blend outperforms either alone.

8. Rules for AI Agents

  1. Execute autonomously. Don't ask permission for engineering work. Build → test → deploy → report.
  2. Never trade categories without edge (sports, crypto prices) UNLESS using non-LLM signal (wallet flow, LMSR).
  3. Always apply Platt calibration before comparing to market price.
  4. Never show Claude the market price when estimating probability.
  5. Asymmetric thresholds: YES 15% edge, NO 5%. NO is structurally favored.
  6. Maker orders on fee-bearing markets. Taker fees kill thin edges.
  7. Quarter-Kelly max. 1/16 Kelly on 5-min markets. NEVER full Kelly.
  8. Resolution time matters. Prioritize fast-resolving markets for validation.
  9. The data-api.polymarket.com/trades endpoint is gold — public wallet-level trade data.
  10. 20% of profits to veterans. Non-negotiable.
  11. When in doubt, paper-trade first before risking real capital on new strategies.

9. Priority Queue (What to Build Next)

UPDATED 2026-03-13: A-6 and B-1 structural alpha lanes formally KILLED. Zero density after 5-day kill-watch. Remaining priority queue focuses on BTC5 optimization, Kalshi integration, and JJ-N launch.

P0 — Build Status (Current)

  1. Added bot/constraint_arb_engine.py with candidate generation, relation classification, resolution gating, sum/graph violation scanning, VPIN veto hook, SQLite logging, and shadow-report CLI.
  2. Added bot/resolution_normalizer.py with source/cutoff/ontology parsing and resolution-equivalence gate.
  3. Added bot/neg_risk_inventory.py with neg-risk routing, augmented safety filters, and atomic NO→YES conversion bookkeeping.
  4. Added tests:
    • tests/test_constraint_graph.py
    • tests/test_neg_risk_filters.py
    • tests/test_arb_execution_partial_fill.py
  5. Added bot/sum_violation_scanner.py runtime loop wiring live Gamma market discovery + CLOB orderbook quotes into ConstraintArbEngine.scan_sum_violations() with JSONL logging and shadow-report output.
  6. Connected debate pipeline fallback only for unresolved pair classifications after heuristic prefilter (enabled via --debate-fallback in constraint_arb_engine.py runtime commands).
  7. Replace A-6 discovery in bot/sum_violation_scanner.py with Gamma /events pagination (active=true, closed=false, limit=50, offset).
  8. Add shared A-6/B-1 quote infrastructure in infra/clob_ws.py (market/user channel clients, chunked subscriptions, reconnect/backoff, shared best-bid/ask store).
  9. Handle CLOB /prices 404s as hard no-orderbook blocks and suspend those events from the active A-6 watchlist for that scan.
  10. Add generic maker-only multi-leg state handling in execution/multileg_executor.py with fill TTL, rollback, unwind TTL, and freeze-on-unhedged-exposure semantics.
  11. Land event watchlist + execution-aware threshold logic in strategies/a6_sum_violation.py.
  12. Land B-1 graph cache, prompt scaffolding, validation, monitor, and execution-planner modules in strategies/b1_dependency_graph.py and strategies/b1_violation_monitor.py.
  13. Add live user-channel fill handling + real order submission on top of the shared multi-leg executor.
  14. Removed B-1 reintegration TODO after kill decision (2026-03-13).
  15. Removed A-6/B-1 live integration TODO after kill decision (2026-03-13).

Other completed modules still available for parallel promotion work:

  • bot/btc_5min_maker.py plus bot/tests/test_btc_5min_maker.py
  • kalshi/weather_arb.py
  • Rolling adaptive Platt selector and ensemble disagreement sizing in bot/jj_live.py + bot/ensemble_estimator.py
  • Validation coverage in tests/test_kalshi_weather_arb.py and bot/tests/test_ensemble_estimator.py

P1 — Near-Term Execution Order

  1. BTC5 guardrail optimization: Widen guardrails for current volatility regime and hold at $5/trade until promotion gate evidence passes.
  2. Kalshi integration: Build settlement reconciliation and city-specific calibration (Miami subtropical bias fix).
  3. Runtime truth reconciliation: Close the local-ledger vs wallet drift gap.
  4. JJ-N launch package: Verified sending domain, curated leads, and first live outreach for Website Growth Audit.

P2 — Website: Competitive Benchmark Harness (Sequenced into Cycles 2-4)

  1. Cycle 2: Publish methodology page (/benchmark/methodology) with T0-T7 test matrix and scoring rubric. No results yet — methodology-first establishes trust.
  2. Cycle 2-3: Build benchmark harness (inventory/ directory structure, Docker orchestration, metrics collection, artifact storage).
  3. Cycle 3: Run first 3 systems (Freqtrade, Hummingbot, NautilusTrader) through T0-T5. Publish system profile pages.
  4. Cycle 4: Run 6 more systems. Launch interactive leaderboard. Publish license risk guide.
  5. Post-sprint: Quarterly updates, expand to commercial SaaS feature comparisons, add legacy systems as historical baselines. See research/dispatches/DISPATCH_097_competitive_inventory_benchmark_blueprint.md for the implementation brief, research/competitive_inventory_benchmark_deep_research.md for the full integrated research, and docs/website/benchmark-methodology.md for the first public-facing benchmark page.

P3 — Hard Kill Rules (Non-Negotiable)

  1. A-6 kill: reject if realized capture <50% of theoretical over a trailing 20-event window. EXECUTED: A-6 killed 2026-03-13 (zero density).
  2. A-6 kill: reject if the allowed universe fails to produce any event below the initial 0.95 guaranteed-dollar cost gate over the observation window. EXECUTED: A-6 killed 2026-03-13.
  3. B-1 kill: reject if relation accuracy drops below 80% on the 50-pair gold set. EXECUTED: B-1 killed 2026-03-13 (zero density).
  4. B-1 kill: reject if deterministic template density remains effectively zero or if resolved false-positive rate exceeds 5%. EXECUTED: B-1 killed 2026-03-13.
  5. Global kill: decommission both strategies if combined cumulative P&L is negative after 30 live days. N/A: both killed before any live P&L.
  6. Program kill: reject live promotion if partial-basket rollback loss exceeds 30% of gross edge. (Retained for future structural strategies.)
  7. Program kill: reject immediately on any augmented-neg-risk rule violation (Other traded, placeholder leakage, broken resolution-equivalence gate). (Retained for future structural strategies.)
  8. Program diagnostic: if VPIN-gated variant materially outperforms ungated variant, treat the issue as execution quality failure before scaling alpha.

10. Backtest Performance (NOT live — skepticism warranted)

Strategy Win Rate Trades Brier
Baseline (5% threshold) 64.9% 470 0.239
Calibrated + Asym + CatFilter 71.2% ~350 0.217
NO-only 76.2% 210 0.239

532 resolved markets. Quarter-Kelly: $75 → $1,353 in backtest. Backtest ≠ live.

11. Fund Structure

  • Entity: LLC taxed as partnership
  • Offering: Reg D 506(b) — friends/family, ≤35 non-accredited
  • CFTC: Rule 4.13 exemption (small pool, <$500K, ≤10 friends)
  • Terms: 0% mgmt fee, 30% carry above HWM, $1K minimum
  • Mission: 20% net profits → veteran suicide prevention

12. Key Technical Details

Signature type (Polymarket): signature_type=1 (POLY_PROXY) = WORKS. Type 2 (Gnosis Safe) fails. The funder must be the proxy wallet address, and the same key path must derive working L2 creds.

Stale position bug (Fixed): sync_resolved_positions() cleans resolved trades from jj_state.json.

Category classification: Keyword + regex patterns. Priority 3 = trade (politics, weather), Priority 0 = skip (sports, crypto).

Velocity scoring: velocity_score = abs(edge) / resolution_days * 365 — annualized edge per unit of capital lockup.

Arb execution contract: Multi-leg arb stays maker-only. Batch orders must remain postOnly=true with OrderType.GTC; do not combine post-only with FAK or FOK.

Market-data contract: For the current structural-arb gate, top-of-book is the primary instrument. WebSocket + batched /prices are first-class; /book is recovery only. A GET /book 404 means "suspend this leg until liquidity appears," not "crash the scan."

Merge contract: Only merge complete baskets above $20. Do not hardcode old contract addresses from research notes; 0x2791... is the Polygon USDC.e collateral token, not the CTF contract.

v3.10.0 — Updated 2026-03-13. A-6 and B-1 structural alpha lanes formally KILLED after reaching the March 14 kill-watch deadline with zero evidence (0 executable constructions for A-6, 0 deterministic template pairs for B-1). Engineering capacity reallocated to BTC5 guardrail optimization and Kalshi integration. BTC5 sleeve remains the active trading proof lane. JJ-N test surfaces remain green.