Research has shown that a small group of traders is dominating prediction markets, with an even smaller group reaping most of the financial rewards. A report by blockchain analytics firm Solidus Labs reveals that profit distribution on Polymarket is highly skewed, with less 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 around $8 million in profits. This trend is consistent with previous academic findings that a small minority of traders drives most price movements. The report highlights that this concentration does not necessarily imply wrongdoing, but rather that some traders have a significant advantage due to their sophistication, capital, or speed.
However, the scale of the imbalance suggests a structural divide between a small group of privileged traders and the broader base of participants. The report also flags signs of wash trading, with around 15% of volume in some markets showing patterns consistent with self-trading or economically neutral positions. Solidus Labs argues that this type of trading has no equivalent in traditional finance and may be driven by incentive farming rather than pure manipulation. While the data is verifiable, the firm's sales pitch for its surveillance platform should be taken into consideration when interpreting the findings.