Research suggests that a small number of traders may be dominating prediction markets, but an even smaller group is reaping most of the financial rewards. A recent report by blockchain analytics firm Solidus Labs found that profit distribution on Polymarket is highly skewed, with less than 1% of wallets capturing approximately half of all profits in key markets. Between December 2025 and February 2026, a mere 0.55% of profitable maker wallets and 0.26% of winning taker wallets accounted for around 50% of gains, translating to roughly $8 million out of $16 million in profits.
This data reinforces previous academic findings that a small minority of traders drives most price movements. While concentration of profits does not necessarily imply wrongdoing, the report argues that the scale of the imbalance suggests a structural divide between a small group of sophisticated traders and the broader base of participants.
The study also identified signs of wash trading, with around 15% of volume in some markets displaying patterns consistent with self-trading or economically neutral positions. Solidus Labs' report relies on verifiable on-chain data, but its framing should be considered in the context of the firm's market surveillance sales pitch.