Research has shown that a small group of traders is dominating prediction markets, with an even smaller group reaping most of the financial rewards. According to a report by blockchain analytics firm Solidus Labs, profit concentration on Polymarket is extreme, with less than 1% of wallets accounting for roughly half of all gains in key markets.
Between December 2025 and February 2026, just 0.55% of profitable maker wallets captured 50% of gains, while 0.26% of winning taker wallets accounted for nearly the same share, with approximately $8 million of the $16 million in profits going to each of these small groups. This data supports previous academic findings that a small minority of traders drives most price discovery, with about 3% of Polymarket traders responsible for this movement.
The report highlights that this concentration of wealth does not necessarily imply wrongdoing, but rather that some traders have significant advantages, including greater sophistication, better capitalization, and faster access to information. However, the scale of the imbalance suggests a structural divide between a small group of traders operating with significant advantages and the broader base of participants. The report also notes signs of wash trading, with roughly 15% of volume in some markets showing patterns consistent with self-trading or economically neutral positions.
This has led to speculation about the potential for incentive farming and manipulation in the market.