Study: Only 3% of Polymarket Accounts Drive Price Discovery and Earn Over 30% Profits, 67% of Accounts Bear All Losses

On April 27, a paper by researchers from the London Business School and Yale University analyzed all transactions on Polymarket from 2023 to 2025, finding that approximately 3% of accounts generated most of the price discovery on the platform. The study covered 1.72 million accounts, 210,322 markets, and about $13.76 billion in trading volume. The paper states that only 3.14% of accounts can be classified as ‘skilled winners,’ meaning their order flow consistently predicts short-term price fluctuations and final outcomes. This group of accounts, along with market makers, accounts for less than 3.5% of all accounts but has earned over 30% of all profits. Accounts categorized as unlucky or poorly skilled, which represent 67% of the total, bear all of the platform’s total losses. Regarding suspected insider trading, the authors identified 1,950 accounts that were opened shortly before a single event and went silent after the event settled. These accounts pushed prices about 7 to 12 times more per dollar than skilled traders, but due to their excessive focus on isolated events, they failed to drive overall accuracy. The paper includes a case study focusing on three accounts opened between December 27 and January 3, which bet on Maduro’s ousting before the disclosure of U.S. military actions, collectively profiting over $630,000. This scenario aligns with the first insider trading lawsuit involving event contracts filed by the U.S. CFTC on Thursday, which accuses U.S. Army Sergeant Gannon Ken Van Dyke of trading based on confidential information before a raid.