New findings indicate that a small group of traders may be controlling prediction markets, but an even smaller subset is reaping most of the financial rewards. A report by blockchain analytics firm Solidus Labs has uncovered extreme profit concentration on Polymarket, 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, translating to approximately $8 million in profits out of $16 million.
This discovery builds upon previous research suggesting that a small minority of traders drives price discovery, with around 3% of Polymarket traders responsible for most price movements. The significant imbalance in profit distribution raises concerns about a structural divide between a small group of sophisticated traders and the broader base of participants. While the report acknowledges that concentration does not necessarily imply wrongdoing, it highlights the need for surveillance infrastructure to monitor such activities.
The study also detected signs of wash trading, with around 15% of volume in some markets exhibiting patterns consistent with self-trading or economically neutral positions. As the report's findings are based on verifiable on-chain data, they underscore the importance of market surveillance and the potential need for regulatory oversight.