Research has shown that a small group of traders may be influencing prediction markets, but a new report by blockchain analytics firm Solidus Labs reveals that an even smaller group is reaping most of the financial rewards. The report found that on Polymarket's politics markets, a mere 0.55% of profitable maker wallets and 0.26% of winning taker wallets accounted for approximately 50% of all gains between December 2025 and February 2026. This translates to around $8 million in profits for each of these tiny cohorts, out of a total of $16 million.
The findings corroborate previous academic research, which suggested that a small minority of traders drives price discovery. 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 speed in acting on information.
However, the scale of the imbalance raises concerns about a structural divide between a small group of privileged traders and the broader base of participants. The report also identified signs of wash trading, with around 15% of volume in some markets exhibiting patterns consistent with self-trading or economically neutral positions. This phenomenon, which has no equivalent in traditional finance, may be driven by incentive farming or manipulation.
The report's findings are based on verifiable on-chain data, but it is essential to consider the context and potential biases, as the firm behind the report sells surveillance platforms for markets.