Research has shown that a small number of traders have a significant impact on prediction markets, but a new report from Solidus Labs reveals that an even smaller group is accumulating the majority of the profits. According to the report, less than 1% of wallets on Polymarket are capturing around half of all gains in key markets. This is evident in the platform's politics markets, where 0.55% of profitable maker wallets and 0.26% of winning taker wallets accounted for nearly 50% of gains between December 2025 and February 2026. In terms of actual profits, approximately $8 million out of $16 million in gains went to these small groups of traders.
This data supports previous academic research, which found that a small minority of traders drives most price discovery on Polymarket. The report highlights that this concentration of wealth does not necessarily imply any wrongdoing, but rather that some traders have a significant advantage due to their sophistication, capital, or ability to act quickly on information.
However, the scale of the imbalance suggests a structural divide between a small group of traders operating with significant advantages and the broader base of participants. The report also notes that some traders may be engaging in wash trading, with around 15% of volume in some markets showing patterns consistent with self-trading or economically neutral positions. This type of trading, which involves buying YES on both sides of a binary prediction market, has no equivalent in traditional finance and may be driven by incentive farming rather than pure manipulation.
The report's findings are based on verifiable on-chain data, but the firm's sales pitch for its surveillance platform, HALO, should be considered when interpreting the results.