Polymarket: 84% of traders are losing money, while 0.033% have taken most of the profits.

Who is the market really serving?

By: Deep Tide TechFlow

Deep Tide Quick Read: On-chain researcher Andrey Sergeenkov’s latest analysis of Polymarket’s 2.5 million wallet addresses shows that 84.1% of traders are in the red, only 2% of addresses have accumulated profits totaling more than $1,000, and 840 addresses (0.033%) are profitable by more than $100k. The timing of this report is particularly delicate—Polymarket has just secured the exclusive MLB prediction market partnership as the top bidder at a price of $300 million, and it is now working hard to drive growth among retail users.

The wealth distribution in on-chain prediction markets is even more brutal than most people imagine.

According to a report by The Defiant on April 6, independent on-chain researcher Andrey Sergeenkov released a profit-and-loss analysis report covering 2.5 million Polymarket wallet addresses, with data through April 1, 2026. The core conclusion: 84.1% of traders are losing money, and fewer than 16% of addresses achieve any degree of positive returns.

This is not the first study of its kind. In December 2025, blockchain analyst DeFi Oasis analyzed 1.7 million addresses and 124 million transactions; at the time, the conclusion was that 70% of traders were not profitable. Sergeenkov’s dataset is larger and the methodology is improved as well (capturing token-splitting and merging operations that earlier research missed), with the loss ratio jumping from 70% to 84%.

At the top of the pyramid: less than 0.26% earn more than $5,000 per month

By tracking all USDC fund flows on the Polygon chain (including buys, sells, redemptions, splits, and merges), Sergeenkov conducted a full-scale analysis of transaction data from two smart contracts: CTF Exchange and NegRisk CTF Exchange.

The numbers in the high-profit range are striking: the share of addresses with average monthly profits above $1,000 is 1.25%; above $5,000 is only 0.26%, or about 6,600 addresses; above $10k is down to just 3,250, accounting for 0.13% of all traders.

More importantly, there’s the issue of consistency. Among the 6,600 addresses that averaged more than $5,000 per month, 53% were only active for one month and then disappeared, and only 2.6% continued trading for more than a year. Sergeenkov summarizes in the report: “Most traders come, trade for a while, and then leave.”

In contrast, bottom-end arbitrageurs harvest profits in a steady way. A research paper from the IMDEA Network Institute in Spain analyzed 86 million on-chain transactions from April 2024 to April 2025, finding that arbitrage traders extracted roughly $40 million in profits purely from price spreads. The single-wallet highest return reached $2 million, coming from 4,049 transactions, with an average profit of $496 per trade.

Retail manual trading can’t beat robots, and information advantage is highly concentrated

The root cause of losses isn’t complicated. IMDEA’s research shows that the biggest profits are concentrated in wallets using automated strategies: arbitrage bots, market-making algorithms, and high-frequency trading systems. Retail traders entering manually typically do so only after prices have already adjusted.

This is the fundamental difference between prediction markets and traditional gambling. Polymarket’s order book is entirely public, and on-chain data is transparent—but that very transparency makes it easier for professional traders to build a systemic advantage. A quant wallet equipped with a low-latency API and a probability model doesn’t compete in the same arena as an ordinary user who opens the app to bet only after seeing the news.

According to Token Terminal data, Polymarket’s nominal trading volume over the past 30 days is about $9.8 billion, and the number of monthly active trading participants is about 462.6k. The platform’s growth itself is fine, but the relationship between user growth and user profitability is inverse—Sergeenkov’s data shows that the decline in the proportion of profitable traders is directly tied to user growth peaks, especially the influx after the U.S. presidential election in November 2024.

Are information aggregation tools or zero-sum games?

This report revives an old debate: who is the prediction market really for?

Supporters’ core argument is information aggregation. Polymarket’s official data says that in the month before outcomes are determined, its price predictions achieve accuracy of more than 94%. In other words, even though 84% of traders are losing money, the market as a whole is still producing valuable probability signals. The losing retail traders, in essence, are paying for the pricing of information.

Critics argue that when a platform has 84% of participants losing money, and profits are highly concentrated in automated traders, its difference from a casino is only wordplay in regulatory classification. Especially in the arena of sports contracts, the line between prediction markets and sports betting is being intentionally blurred.

Polymarket’s valuation has surpassed $20 billion, and the Intercontinental Exchange (the parent of NYSE) invested $2 billion in October 2025. Clearly, capital markets are betting on the prediction market growth story.

But Sergeenkov’s report raises a simple question: when the next wave of 2.5 million users floods in, will their fate be any different from the previous wave?