How to Become a Market Maker

struct Order {
    address maker;        // Your wallet (= quote.maker)
    uint256 seriesId;     // Option series (= ERC-1155 token ID)
    uint256 optionAmount; // Option tokens (6 decimals)
    uint256 premiumAmount;// USDC total premium (6 decimals)
    bool    makerSelling; // true when the taker is buying
    address taker;        // Restricted to this taker address
    uint256 validUntil;   // Order expiry (Unix timestamp)
    uint256 nonce;        // Replay protection
}

GET /maker/v1/status

{
  "protocolVersion": 3,
  "makersConnected": 3,
  "socketsConnected": 4,
  "streamPath": "/v1/mm/quote-requests/stream",
  "quotePath": "/v1/mm/quotes",
  "wsPath": "/maker/v1/ws"
}

npm install eventsource ws ethers

import EventSource from 'eventsource';
import WebSocket from 'ws';
import { Wallet } from 'ethers';

const API = 'https://api.convallax.com';
const WS = 'wss://api.convallax.com';
const API_KEY = process.env.MAKER_API_KEY;
const wallet = new Wallet(process.env.MM_PRIVATE_KEY);

// Map requestId -> server-generated quoteId so we can confirm on accept.
const quoteIds = new Map();

function computePrice(option, trade) {
  // Your pricing model here. Return a price for ONE option, in (0, 1).
  return 0.12;
}

// The most whole options you're willing to write at `price`.
// Buys send a USDC budget; sells send a contract count.
function computeSize(option, trade, price) {
  if (trade.side === 'buy') {
    const wanted = Math.floor(trade.budgetUsd / price); // what the taker would get
    return Math.min(wanted, yourMaxContractsForRisk(option, price));
  }
  return trade.size; // sell: match the taker's requested contracts (or ≥ 50%)
}

// --- Channel 1: SSE quote-request stream (server -> maker) ---
const stream = new EventSource(`${API}/v1/mm/quote-requests/stream`, {
  headers: { 'X-API-Key': API_KEY },
});

stream.addEventListener('connected', (e) =>
  console.log('Stream connected as', JSON.parse(e.data).makerId)
);

stream.addEventListener('quote_request', async (e) => {
  const req = JSON.parse(e.data);
  const { option, trade } = req.params;
  const price = computePrice(option, trade);

  // --- Channel 2: submit/update the quote over REST ---
  const res = await fetch(`${API}/v1/mm/quotes`, {
    method: 'POST',
    headers: { 'Content-Type': 'application/json', 'X-API-Key': API_KEY },
    body: JSON.stringify({
      requestId: req.requestId,
      quote: {
        maker: wallet.address,        // MUST be your own wallet
        side: trade.side,             // must match the taker's side
        price,                        // per ONE option, in (0, 1)
        size: computeSize(option, trade, price), // max whole options you'll fill
      },
    }),
  });
  const body = await res.json();
  if (body.success) quoteIds.set(req.requestId, body.quoteId);
});

stream.addEventListener('quote_request_expired', (e) => {
  quoteIds.delete(JSON.parse(e.data).requestId);
});

stream.onerror = () => console.log('Stream disconnected — will retry');

// --- Channel 3: post-trade WebSocket (server -> maker) ---
const ws = new WebSocket(`${WS}/maker/v1/ws?apiKey=${API_KEY}`);
ws.on('ping', () => ws.pong());

ws.on('message', async (raw) => {
  const msg = JSON.parse(raw);

  switch (msg.type) {
    case 'connected':
      console.log(`WebSocket connected (protocol v${msg.protocolVersion})`);
      break;

    case 'quote:accepted': {
      // You won — sign with your own key and confirm over REST before the deadline.
      const signature = await wallet.signTypedData(msg.domain, msg.types, msg.order);
      await fetch(`${API}/v1/mm/quotes/${msg.quoteId}/confirm`, {
        method: 'POST',
        headers: { 'Content-Type': 'application/json', 'X-API-Key': API_KEY },
        body: JSON.stringify({ signature }),
      });
      console.log(`Confirmed quote ${msg.quoteId} for ${msg.requestId}`);
      break;
    }

    case 'quote:confirmed':
      console.log(`Won and confirmed: ${msg.requestId}`);
      break;

    case 'quote:rejected':
      console.log(`Lost ${msg.requestId}: ${msg.reason}`);
      break;
  }
});