Polymarket Trading Analysis Reveals Profit Concentration and Market Dynamics
Polymarket, a decentralized prediction markets platform, has approximately 1.7 million trading addresses. Analysis shows that roughly 70% of these addresses realized losses while about 30% were profitable, with total realized profits amounting to approximately $3.7 billion, according to DeFi Oasis.
Profit concentration on Polymarket is highly skewed: less than 0.04% of addresses captured over 70% of the total realized profits. While the most profitable addresses earned between $0 and $1,000 account for 24.56% of addresses, they contributed only 0.86% of total profits. Earning more than $1,000 places traders in the top 4.9% of participants. Specifically, 668 addresses with profits exceeding $1 million accounted for 71% of all realized gains, and an additional 2,551 traders earned between $100,000 and $1 million.
Realized profit and loss (P&L) is calculated as sale proceeds plus redemptions minus purchase costs, explicitly excluding unrealized gains and losses. The platform's extreme profit concentration mirrors patterns seen in traditional markets and suggests a system where retail traders effectively subsidize profits for a small elite. Moreover, large open positions may show negative realized returns despite having paper gains.
Polymarket continues to grow, with monthly active traders nearing 462,600 and trading volumes surpassing previous records. The platform completed a beta relaunch in the United States in November 2023, following a three-year offshore period related to a $1.4 million settlement with the Commodity Futures Trading Commission (CFTC) in 2022. Polymarket’s post-money valuation stands at about $9 billion after raising funds, including a $2 billion commitment from Intercontinental Exchange (ICE). Founder Shayne Coplan remains a key figure.
The regulatory and competitive landscape remains active: Vitalik Buterin has defended prediction markets against ethical criticisms. Meanwhile, competition intensifies from rival platforms and incumbents such as Google Finance, FanDuel/CME, Coinbase lawsuits, and Kalshi. Combined trading volume across major prediction market platforms reached $44 billion in 2024, highlighting the sector's expanding activity and competition.
