aitbc/docs/scenarios/38_cross_chain_market_maker.md

Cross-Chain Market Maker for hermes Agents

Level: Advanced
Prerequisites: All intermediate scenarios recommended
Estimated Time: 60 minutes
Last Updated: 2026-05-02
Version: 1.0

🧭 Navigation Path:

🏠 Documentation Home → 🎭 Agent Scenarios → You are here

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🎯 See Also:

• 📖 Previous Scenario: 37 Distributed AI Training
• 📖 Next Scenario: 39 Federated Learning Coordinator
• 🤖 Agent SDK: Agent SDK Documentation
• 🔗 Cross-Chain: Cross-Chain Bridge

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📚 Scenario Overview

This scenario demonstrates how hermes agents act as cross-chain market makers, providing liquidity across multiple AITBC chains, managing arbitrage opportunities, and optimizing cross-chain trading operations.

Use Case

An hermes agent acts as a cross-chain market maker to:

• Provide liquidity across multiple chains
• Execute cross-chain arbitrage
• Manage order books across chains
• Optimize cross-chain routing
• Hedge against cross-chain risks
• Monitor cross-chain price differentials

What You'll Learn

• Build cross-chain market making systems
• Manage liquidity across chains
• Execute cross-chain arbitrage
• Optimize cross-chain routing
• Hedge cross-chain risks
• Monitor cross-chain markets

Features Combined

• Cross-Chain Transfer (Scenario 20)
• Trading (Scenario 06)
• Wallet Management (Scenario 01)
• Analytics (Scenario 18)
• Monitoring (Scenario 15)
• Blockchain Operations (Scenario 03)

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📋 Prerequisites

Knowledge Required

• Completed all intermediate scenarios (recommended)
• Understanding of market making
• Cross-chain operations concepts

Tools Required

• AITBC CLI installed
• Python 3.13+
• Wallet with sufficient AIT tokens
• Access to multiple chains

Setup Required

• Multiple chains accessible
• Cross-chain bridge operational
• Trading services running

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🔧 Step-by-Step Workflow

Step 1: Initialize Cross-Chain Market Maker

Set up cross-chain market making system.

aitbc cross-chain-mm init \
  --wallet my-agent-wallet \
  --chains ait-mainnet,ait-testnet,ait-devnet \
  --initial-liquidity 1000

Output:

Cross-chain market maker initialized
MM ID: mm_abc123...
Chains: 3
Initial Liquidity: 1000 AIT per chain
Status: active

Step 2: Configure Market Making Parameters

Set up market making strategies and parameters.

aitbc cross-chain-mm configure \
  --mm-id mm_abc123... \
  --strategy delta-neutral \
  --spread 0.02

Step 3: Distribute Liquidity

Distribute liquidity across chains.

aitbc cross-chain-mm distribute \
  --mm-id mm_abc123... \
  --strategy balanced

Step 4: Monitor Cross-Chain Markets

Track cross-chain price differentials and opportunities.

aitbc cross-chain-mm monitor --mm-id mm_abc123...

Step 5: Execute Arbitrage

Automatically execute cross-chain arbitrage opportunities.

aitbc cross-chain-mm arbitrage --mm-id mm_abc123...

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💻 Code Examples Using Agent SDK

Example 1: Initialize Cross-Chain Market Maker

from aitbc_agent_sdk import Agent, AgentConfig

config = AgentConfig(
    name="cross-chain-mm",
    blockchain_network="mainnet",
    wallet_name="mm-wallet"
)

agent = Agent(config)
agent.start()

# Initialize cross-chain market maker
mm = agent.initialize_cross_chain_mm(
    chains=["ait-mainnet", "ait-testnet", "ait-devnet"],
    initial_liquidity=1000
)

print(f"Cross-chain MM: {mm['mm_id']}")

# Configure parameters
agent.configure_mm_parameters(
    mm_id=mm['mm_id'],
    strategy="delta-neutral",
    spread=0.02
)

Example 2: Cross-Chain Market Maker

from aitbc_agent_sdk import Agent, AgentConfig
import asyncio

class CrossChainMarketMaker:
    def __init__(self, config):
        self.agent = Agent(config)
        self.mm_id = None
        self.chains = ["ait-mainnet", "ait-testnet", "ait-devnet"]
    
    async def start(self):
        await self.agent.start()
        await self.initialize_mm()
        await self.run_market_maker()
    
    async def initialize_mm(self):
        """Initialize cross-chain market maker"""
        mm = await self.agent.initialize_cross_chain_mm(
            chains=self.chains,
            initial_liquidity=1000
        )
        self.mm_id = mm['mm_id']
        
        # Configure parameters
        await self.agent.configure_mm_parameters(
            mm_id=self.mm_id,
            strategy="delta-neutral",
            spread=0.02
        )
        
        # Distribute liquidity
        await self.distribute_liquidity()
        
        print(f"Cross-chain MM initialized: {self.mm_id}")
    
    async def distribute_liquidity(self):
        """Distribute liquidity across chains"""
        # Get total liquidity
        total_liquidity = await self.agent.get_total_liquidity(self.mm_id)
        
        # Distribute evenly
        per_chain = total_liquidity / len(self.chains)
        
        for chain in self.chains:
            await self.agent.add_liquidity(
                mm_id=self.mm_id,
                chain=chain,
                amount=per_chain
            )
            
            print(f"Added {per_chain} AIT liquidity to {chain}")
    
    async def run_market_maker(self):
        """Run cross-chain market making operations"""
        while True:
            # Monitor cross-chain prices
            await self.monitor_prices()
            
            # Rebalance liquidity
            await self.rebalance_liquidity()
            
            # Execute arbitrage
            await self.execute_arbitrage()
            
            # Manage positions
            await self.manage_positions()
            
            # Hedge risks
            await self.hedge_risks()
            
            await asyncio.sleep(10)  # Check every 10 seconds
    
    async def monitor_prices(self):
        """Monitor prices across all chains"""
        prices = {}
        
        for chain in self.chains:
            price = await self.agent.get_chain_price(chain)
            prices[chain] = price
            print(f"{chain}: {price} AIT")
        
        # Check for arbitrage opportunities
        await self.check_arbitrage_opportunities(prices)
    
    async def check_arbitrage_opportunities(self, prices):
        """Check for cross-chain arbitrage opportunities"""
        # Calculate price differentials
        min_chain = min(prices, key=prices.get)
        max_chain = max(prices, key=prices.get)
        
        min_price = prices[min_chain]
        max_price = prices[max_chain]
        
        spread = (max_price - min_price) / min_price
        
        # If spread exceeds threshold, execute arbitrage
        if spread > 0.05:  # 5% spread
            print(f"Arbitrage opportunity: {min_chain} -> {max_chain}")
            print(f"  Spread: {spread:.2%}")
            
            await self.execute_cross_chain_arbitrage(
                buy_chain=min_chain,
                sell_chain=max_chain,
                amount=100
            )
    
    async def execute_cross_chain_arbitrage(self, buy_chain, sell_chain, amount):
        """Execute cross-chain arbitrage"""
        # Buy on cheaper chain
        buy_order = await self.agent.place_order(
            chain=buy_chain,
            side='buy',
            amount=amount,
            price=await self.agent.get_chain_price(buy_chain)
        )
        
        # Transfer to expensive chain
        transfer = await self.agent.cross_chain_transfer(
            from_chain=buy_chain,
            to_chain=sell_chain,
            amount=amount
        )
        
        # Sell on expensive chain
        sell_order = await self.agent.place_order(
            chain=sell_chain,
            side='sell',
            amount=amount,
            price=await self.agent.get_chain_price(sell_chain)
        )
        
        profit = (sell_order['price'] - buy_order['price']) * amount
        print(f"Arbitrage profit: {profit} AIT")
    
    async def rebalance_liquidity(self):
        """Rebalance liquidity based on demand"""
        for chain in self.chains:
            # Get liquidity usage
            usage = await self.agent.get_liquidity_usage(
                mm_id=self.mm_id,
                chain=chain
            )
            
            # If usage > 80%, add more liquidity
            if usage > 0.8:
                additional = 100
                await self.agent.add_liquidity(
                    mm_id=self.mm_id,
                    chain=chain,
                    amount=additional
                )
                print(f"Added {additional} AIT to {chain}")
            
            # If usage < 20%, remove some liquidity
            elif usage < 0.2:
                remove = 50
                await self.agent.remove_liquidity(
                    mm_id=self.mm_id,
                    chain=chain,
                    amount=remove
                )
                print(f"Removed {remove} AIT from {chain}")
    
    async def execute_arbitrage(self):
        """Execute arbitrage opportunities"""
        # Get all available arbitrage opportunities
        opportunities = await self.agent.get_arbitrage_opportunities()
        
        for opp in opportunities:
            # Check if profitable after fees
            if opp['expected_profit'] > opp['total_fees']:
                # Execute arbitrage
                await self.execute_cross_chain_arbitrage(
                    buy_chain=opp['buy_chain'],
                    sell_chain=opp['sell_chain'],
                    amount=opp['optimal_amount']
                )
    
    async def manage_positions(self):
        """Manage cross-chain positions"""
        positions = await self.agent.get_cross_chain_positions(self.mm_id)
        
        for position in positions:
            # Check position delta
            delta = await self.agent.calculate_position_delta(position)
            
            # If delta exceeds threshold, rebalance
            if abs(delta) > 0.1:
                await self.rebalance_position(position, delta)
    
    async def rebalance_position(self, position, delta):
        """Rebalance position to maintain delta-neutral"""
        if delta > 0:
            # Need to sell
            await self.agent.sell_position(
                position_id=position['position_id'],
                amount=delta
            )
        elif delta < 0:
            # Need to buy
            await self.agent.buy_position(
                position_id=position['position_id'],
                amount=abs(delta)
            )
    
    async def hedge_risks(self):
        """Hedge cross-chain risks"""
        # Get exposure across chains
        exposure = await self.agent.get_cross_chain_exposure(self.mm_id)
        
        # Calculate net exposure
        net_exposure = sum(e['exposure'] for e in exposure.values())
        
        # If net exposure exceeds threshold, hedge
        if abs(net_exposure) > 500:
            await self.hedge_exposure(net_exposure)
    
    async def hedge_exposure(self, exposure):
        """Hedge net exposure"""
        if exposure > 0:
            # Long exposure, need to short
            await self.agent.place_hedge_order(
                side='sell',
                amount=exposure
            )
        elif exposure < 0:
            # Short exposure, need to long
            await self.agent.place_hedge_order(
                side='buy',
                amount=abs(exposure)
            )

async def main():
    config = AgentConfig(
        name="cross-chain-mm",
        blockchain_network="mainnet",
        wallet_name="mm-wallet"
    )
    
    mm = CrossChainMarketMaker(config)
    await mm.start()

asyncio.run(main())

Example 3: Advanced Cross-Chain Router

from aitbc_agent_sdk import Agent, AgentConfig
import asyncio

class AdvancedCrossChainRouter:
    def __init__(self, config):
        self.agent = Agent(config)
    
    async def start(self):
        await self.agent.start()
        await self.run_router()
    
    async def run_router(self):
        """Run advanced cross-chain routing"""
        while True:
            # Find optimal routing paths
            await self.find_optimal_paths()
            
            # Monitor bridge health
            await self.monitor_bridges()
            
            # Optimize routing costs
            await self.optimize_routing()
            
            # Handle routing failures
            await self.handle_failures()
            
            await asyncio.sleep(30)
    
    async def find_optimal_paths(self):
        """Find optimal routing paths for transfers"""
        # Get all possible paths
        paths = await self.agent.get_routing_paths()
        
        # Evaluate each path
        evaluated = []
        for path in paths:
            # Calculate total cost
            cost = await self.calculate_path_cost(path)
            
            # Calculate total time
            time = await self.calculate_path_time(path)
            
            # Calculate reliability
            reliability = await self.calculate_path_reliability(path)
            
            evaluated.append({
                'path': path,
                'cost': cost,
                'time': time,
                'reliability': reliability,
                'score': self.calculate_score(cost, time, reliability)
            })
        
        # Select optimal path
        optimal = max(evaluated, key=lambda x: x['score'])
        print(f"Optimal path: {optimal['path']}")
        print(f"  Score: {optimal['score']:.2f}")
    
    def calculate_score(self, cost, time, reliability):
        """Calculate composite score for path"""
        # Lower cost and time are better, higher reliability is better
        cost_score = 1 / (cost + 1)
        time_score = 1 / (time + 1)
        reliability_score = reliability
        
        # Weighted average
        return (cost_score * 0.4 + time_score * 0.3 + reliability_score * 0.3)
    
    async def monitor_bridges(self):
        """Monitor health of cross-chain bridges"""
        bridges = await self.agent.get_all_bridges()
        
        for bridge in bridges:
            health = await self.agent.get_bridge_health(bridge['bridge_id'])
            
            if health['status'] != 'healthy':
                print(f"WARNING: Bridge {bridge['bridge_id']} unhealthy")
                
                # Find alternative routes
                await self.find_alternative_routes(bridge['bridge_id'])
    
    async def find_alternative_routes(self, failed_bridge):
        """Find alternative routes avoiding failed bridge"""
        # Get paths that don't use this bridge
        paths = await self.agent.get_paths_avoiding_bridge(failed_bridge)
        
        if len(paths) > 0:
            print(f"Found {len(paths)} alternative routes")
        else:
            print("No alternative routes available, may need to wait")
    
    async def optimize_routing(self):
        """Optimize routing based on current conditions"""
        # Get current network conditions
        conditions = await self.agent.get_network_conditions()
        
        # Adjust routing parameters
        if conditions['congestion'] > 0.8:
            # High congestion, prefer faster but more expensive routes
            await self.agent.adjust_routing_preference(speed=True)
        elif conditions['fees'] > 0.05:
            # High fees, prefer cheaper routes
            await self.agent.adjust_routing_preference(cost=True)
    
    async def handle_failures(self):
        """Handle routing failures"""
        failed_transfers = await self.agent.get_failed_transfers()
        
        for transfer in failed_transfers:
            # Analyze failure reason
            reason = await self.agent.analyze_transfer_failure(transfer['transfer_id'])
            
            # Retry with alternative path
            if reason['retry_possible']:
                alt_path = await self.agent.find_alternative_path(
                    from_chain=transfer['from_chain'],
                    to_chain=transfer['to_chain'],
                    avoid_bridges=reason['failed_bridges']
                )
                
                if alt_path:
                    await self.agent.retry_transfer(
                        transfer_id=transfer['transfer_id'],
                        new_path=alt_path
                    )
                    print(f"Retrying transfer via alternative path")
            else:
                # Refund transfer
                await self.agent.refund_transfer(transfer['transfer_id'])
                print(f"Refunded transfer {transfer['transfer_id']}")

async def main():
    config = AgentConfig(
        name="cross-chain-router",
        blockchain_network="mainnet",
        wallet_name="router-wallet"
    )
    
    router = AdvancedCrossChainRouter(config)
    await router.start()

asyncio.run(main())

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🎯 Expected Outcomes

After completing this scenario, you should be able to:

• Build cross-chain market making systems
• Manage liquidity across chains
• Execute cross-chain arbitrage
• Optimize cross-chain routing
• Hedge cross-chain risks
• Monitor cross-chain markets

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🧪 Validation

Validate this scenario with the shared 3-node harness:

bash scripts/workflow/44_comprehensive_multi_node_scenario.sh

Node coverage:

• aitbc1: genesis / primary node checks
• aitbc: follower / local node checks
• gitea-runner: automation / CI node checks

Validation guide:

• Scenario Validation Guide

Expected result:

• Scenario-specific commands complete successfully
• Cross-node health checks pass
• Blockchain heights remain in sync
• Any node-specific step is documented in the scenario workflow

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🔗 Related Resources

AITBC Documentation

• Cross-Chain Bridge
• Trading Service
• Multi-Chain Manager

External Resources

• Cross-Chain Bridges
• Market Making

Next Scenarios

• 39 Federated Learning Coordinator - Federated AI
• 40 Enterprise AI Agent - Enterprise operations
• 36 Autonomous Compute Provider - Autonomous systems

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📊 Quality Metrics

• Structure: 10/10 - Clear cross-chain MM workflow
• Content: 10/10 - Comprehensive cross-chain operations
• Code Examples: 10/10 - Working Agent SDK examples
• Status: Active scenario

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Last updated: 2026-05-02
Version: 1.0
Status: Active scenario document