Research has shown that a small group of traders may be influencing prediction markets, but an even smaller group is taking home the lion's share of the profits. A recent report by blockchain analytics firm Solidus Labs has found that profit concentration on Polymarket is extremely skewed, with less than 1% of wallets capturing around half of all gains 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 roughly 50% of gains, with approximately $8 million of the $16 million in profits going to each of these tiny groups. This data reinforces earlier academic findings that about 3% of Polymarket traders drive most price discovery, with a small minority moving prices and an even smaller minority retaining the profits.
The report highlights that this concentration does not necessarily imply wrongdoing, as some traders may have an edge due to their sophistication, capital, or speed of action. However, the scale of the imbalance suggests a structural divide between a small group operating with significant advantages and the broader base of participants. The report notes that the participants capturing a disproportionate share of profits are operating in a different league, with access to deeper capital, better infrastructure, and more effective execution strategies.
The study also identifies signs of wash trading, with around 15% of volume in some markets exhibiting patterns consistent with self-trading or economically neutral positions. Solidus argues that this trade has no equivalent in traditional finance and may be driven by incentive farming rather than pure manipulation, potentially linked to Polymarket's forthcoming POLY airdrop. While Solidus has a vested interest in promoting its surveillance platform, the on-chain data is verifiable, and the underlying numbers remain unchanged.