Research suggests that a small faction of traders is dictating the direction of prediction markets, but an even smaller faction is accumulating the majority of the profits. A recent report by blockchain analytics firm Solidus Labs has uncovered that profit distribution on Polymarket is severely skewed, with fewer than 1% of wallets accounting for 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 captured 50% of gains in Polymarket's politics markets, translating to approximately $8 million out of $16 million in profits. This data reinforces earlier findings that a small minority of traders drives most price movements. While some traders may possess superior skills, resources, or speed, the report argues that the extent of this disparity suggests a deep-seated divide between a select group operating with considerable advantages and the broader user base.
The study also identifies potential signs of wash trading, with around 15% of volume in certain markets exhibiting patterns consistent with self-trading or economically neutral positions. As a result, the report emphasizes the need for surveillance infrastructure to monitor such activities, potentially giving an edge to more sophisticated traders.