Research has shown that a small minority of traders influences market prices, but a new report by blockchain analytics firm Solidus Labs reveals that an even smaller group is accumulating the majority of the profits. The report finds that on Polymarket's politics markets, a mere 0.55% of profitable maker wallets and 0.26% of winning taker wallets captured around 50% of the gains between December 2025 and February 2026, translating to approximately $8 million out of $16 million in profits. This discovery reinforces previous academic findings that a small percentage of traders drives most of the price discovery on Polymarket.
The significant disparity in profit distribution underscores the fact that concentration does not necessarily imply wrongdoing, as some traders may possess superior skills, more capital, or faster access to information. However, the report suggests that the scale of the imbalance may indicate a structural divide between a small group of traders operating with significant advantages and the broader base of participants. According to the report, the traders capturing a disproportionate share of profits are 'operating in a different league entirely,' with greater capital depth, infrastructure, and execution strategies that are beyond the reach of most users.
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. 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, particularly in anticipation of Polymarket's forthcoming POLY airdrop. It is essential to note that Solidus, the firm behind the report, sells a surveillance platform and has a vested interest in promoting the need for market surveillance infrastructure.