Research has long suggested that a small group of traders drives price movements in prediction markets, but new data indicates an even smaller cohort is reaping the majority of the rewards. A recent report from blockchain analytics firm Solidus Labs found that on Polymarket, a minuscule fraction of wallets - less than 1% - is capturing roughly half of all gains in key markets.
Between December 2025 and February 2026, a mere 0.55% of profitable maker wallets and 0.26% of winning taker wallets accounted for approximately 50% of gains, with each group accruing around $8 million out of $16 million in profits. This phenomenon is not entirely new, as previous academic work has shown that a small minority of traders drives most price discovery. However, the latest findings sharpen this picture, revealing a stark contrast between the concentration of profits and the broader base of participants.
The report suggests that this imbalance may be due to a structural divide between a small group operating with significant advantages, including greater capital depth, infrastructure, and execution strategies, and the majority of users. Furthermore, the study identifies potential signs of wash trading, with around 15% of volume in some markets exhibiting patterns consistent with self-trading or economically neutral positions.
While some of this activity may be driven by incentive farming rather than manipulation, it highlights the need for surveillance infrastructure in prediction markets. The report's findings are based on verifiable, on-chain data, but its framing should be considered in the context of the firm's sales pitch for its HALO surveillance platform.