paper_trade · Polymarket MCP Server MCP: Risk & Policy

WHAT IT DOES

What paper_trade does on Polymarket MCP Server

AI agents use paper_trade to commit financial operations through Polymarket MCP Server — usually the final step of a payment, billing, or trading workflow. A call moves real money.

WHY IT NEEDS A POLICY

Why paper_trade needs a policy

The name 'paper_trade' suggests simulating trades, which in a true paper trading context would be non-financial (no real money). However, given this server deals with real prediction market data, arbitrage scanning, and financial calculations, there's ambiguity about whether this executes real or simulated trades.

From the tool's definition Tool name 'paper_trade' and server context involving financial metrics, Kelly bet sizing, and prediction markets. Description is empty.

Attacks that exploit this kind of access

Recommended rule Ready

Verdict

paper_trade Approval-gated

Any call to paper_trade is blocked until a human approves it. The rest of the server keeps working.

View as policy code

policy.json

{
  "version": "1",
  "default": "deny",
  "tools": {
    "paper_trade": {
      "deny_if": [
        {
          "conditions": [],
          "on_deny": "Requires human approval."
        }
      ]
    }
  }
}

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PolicyLayer is an MCP gateway: every tool call is checked against your rule before it reaches Polymarket MCP Server, so you can run agents against it safely.

FAQ

Questions about paper_trade

What does the paper_trade tool do? +

paper_trade. It is categorised as a Financial tool in the Polymarket MCP Server MCP Server, which means it involves financial transactions. Block by default and require explicit approval.

How do I enforce a policy on paper_trade? +

Register the Polymarket MCP Server MCP server in PolicyLayer and add a rule for paper_trade: allow, deny, rate-limit, or require approval. Point your MCP client at the PolicyLayer proxy URL and the rule is enforced on every call, before it reaches Polymarket MCP Server. Nothing to install.

What risk level is paper_trade? +

paper_trade is a Financial tool with critical risk. Critical-risk tools should be blocked by default and only enabled with explicit human approval.

Can I rate-limit paper_trade? +

Yes. Add a rate_limit block to the paper_trade rule in your PolicyLayer policy. For example, setting max: 10 and window: 60 limits the tool to 10 calls per minute. Rate limits are tracked per agent session and reset automatically.

How do I block paper_trade completely? +

Set action: deny in the PolicyLayer policy for paper_trade. The AI agent will receive a policy violation error and cannot call the tool. You can also include a reason field to explain why the tool is blocked.

What MCP server provides paper_trade? +

paper_trade is provided by the Polymarket MCP Server MCP server (miles0sage/polymarket-mcp). PolicyLayer sits as a proxy in front of this server to enforce policies before tool calls reach the server.