Recent findings indicate that a tiny fraction of traders is dominating the profits on Polymarket, with a minuscule group of wallets capturing nearly half of the total gains. According to a report by blockchain analytics firm Solidus Labs, the concentration of profits on Polymarket is stark, with fewer than 1% of wallets garnering around half of the total profits in key markets. Between December 2025 and February 2026, the report found that a mere 0.55% of profitable maker wallets and 0.26% of winning taker wallets accounted for approximately 50% of the gains. In terms of actual dollars, this translates to around $8 million out of $16 million in profits going to these small groups.
This data reinforces a trend observed in academic research, which suggests that a small minority of traders drives most price movements. A study by the London Business School and Yale, analyzed by CoinDesk, previously found that about 3% of Polymarket traders are responsible for most price discovery. The disparity highlights a crucial point: a high concentration of profits does not necessarily imply any wrongdoing. Some traders may simply possess more advanced skills, greater capital, or faster access to information, giving them a competitive edge.
However, the report argues that the extent of the imbalance suggests a deep-seated divide between a small, privileged group of traders and the broader base of participants. The report states that the traders capturing a disproportionate share of profits are operating in a distinctly different league, with advantages such as greater capital, better infrastructure, and more effective execution strategies that are beyond the reach of most users. Additionally, Solidus' study identified signs of wash trading, with around 15% of volume in some markets exhibiting patterns consistent with self-trading or economically neutral positions. In a binary prediction market, outcome tokens are designed to sum to approximately $1.00, allowing a trader to buy YES on both sides of a trade within the same time frame, register volume on each leg, and remain economically delta-neutral.
Solidus notes that this type of trade has no equivalent in traditional finance. Some of this volume may be the result of incentive farming rather than pure manipulation, as it is widely speculated that Polymarket's upcoming POLY airdrop will use trading volume as a metric to allocate tokens.
The report serves as a sales pitch for Solidus' market surveillance platform, HALO, which is set to be deployed across over 4,000 markets on Kalshi, Polymarket's largest U.S.-regulated competitor. While the data is verifiable and on-chain, the framing of the report – emphasizing the need for surveillance infrastructure, preferably Solidus' – is part of the sales pitch. This does not change the underlying numbers, but it does suggest that the findings should be interpreted with a critical eye.