Research has shown that a small group of traders may be influencing prediction markets, but an even smaller group is reaping most of the financial rewards. A report by blockchain analytics firm Solidus Labs has found that profit distribution on Polymarket is highly concentrated, with less than 1% of wallets capturing around half of the total 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 approximately 50% of the profits, amounting to around $8 million out of $16 million. This data reinforces previous academic findings that a small minority of traders drives most price discovery on Polymarket.
While this concentration of wealth does not necessarily imply wrongdoing, it suggests a significant divide between a small group of sophisticated traders and the broader base of participants. The report highlights that the traders capturing a disproportionate share of profits have access to greater capital, infrastructure, and execution strategies. Additionally, the study 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 has no equivalent in traditional finance and may be driven by incentive farming rather than pure manipulation. The findings are based on verifiable on-chain data, but the framing of the report should be considered in the context of Solidus' market surveillance sales pitch.