Research has shown that a small group of traders may be influencing prediction markets, but an even smaller group is reaping most of the financial rewards. A recent report by blockchain analytics firm Solidus Labs found that on Polymarket, less than 1% of wallets are capturing around half of all profits in key markets. Between December 2025 and February 2026, just 0.55% of profitable maker wallets and 0.26% of winning taker wallets accounted for approximately 50% of gains, with roughly $8 million of the $16 million in profits going to each of these tiny groups.
This data supports previous academic findings that a small minority of traders drives most price discovery, with around 3% of Polymarket traders responsible for this movement. The report highlights that this concentration of wealth does not necessarily imply wrongdoing, but rather that some traders have significant advantages, including more capital, better infrastructure, and faster access to information.
However, the scale of the imbalance suggests a structural divide between a small group of sophisticated traders and the broader base of participants. The report also identified signs of wash trading, with around 15% of volume in some markets showing patterns consistent with self-trading or economically neutral positions. This phenomenon, which has no equivalent in traditional finance, may be driven by incentive farming rather than pure manipulation, particularly with Polymarket's forthcoming POLY airdrop expected to factor in trading volume as a metric to allocate tokens.