Author: Shenchao TechFlow
DeepChain Summary: A recent analysis by on-chain researcher Andrey Sergeenkov of 2.5 million wallet addresses on Polymarket reveals that 84.1% of traders are currently unprofitable, only 2% of addresses have accumulated profits exceeding $1,000, and just 840 addresses (0.033%) have profited over $100,000. This report was released at a delicate moment—just as Polymarket secured exclusive rights as a predictive market partner for MLB at a valuation of up to $300 million, and is aggressively pushing to grow its retail user base.
Wealth distribution on on-chain prediction markets is even harsher than most people realize.
According to The Defiant on April 6, independent on-chain researcher Andrey Sergeenkov released an analysis report covering 2.5 million Polymarket wallet addresses, with data as of April 1, 2026. Key finding: 84.1% of traders lost money, and fewer than 16% of addresses achieved any level 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, concluding that 70% of traders were unprofitable. Sergeenkov’s sample size is larger and his methodology improved (capturing token splits and merges overlooked in prior research), raising the loss rate from 70% to 84%.
At the top of the pyramid: Less than 0.26% of people earn over $5,000 per month.
Sergeenkov conducted a comprehensive analysis of the transaction data for the CTF Exchange and NegRisk CTF Exchange smart contracts by tracking all USDC cash flows on the Polygon chain, including purchases, sales, redemptions, splits, and merges.
The numbers for high-profit ranges are striking: 1.25% of addresses earned over $1,000 per month on average; only 0.26%, or about 6,600 addresses, earned over $5,000; and just 3,250 addresses, or 0.13% of all traders, earned over $10,000.
More critically, there is the issue of sustainability. Among the 6,600 addresses with average monthly profits exceeding $5,000, 53% disappeared after just one month of activity, and only 2.6% continued trading for over a year. Sergeenkov concluded in the report: “Most traders come, trade for a while, and then leave.”
In contrast, arbitrageurs at the bottom are steadily harvesting profits. An academic paper from the IMDEA Networks Institute in Spain analyzed 86 million on-chain transactions between April 2024 and April 2025, finding that arbitrage traders extracted approximately $40 million in profits solely from price spreads. The highest single-wallet profit reached $2 million from 4,049 trades, averaging $496 per transaction.
Retail traders cannot compete with bots, as information advantages are highly concentrated.
The root of losses is not complicated. IMDEA's research shows that the largest profits are concentrated in wallets using automated strategies: arbitrage bots, market-making algorithms, and high-frequency trading systems. Retail traders who trade manually typically enter the market only after price adjustments have already occurred.
This is the fundamental difference between prediction markets and traditional betting. Polymarket’s order book is fully public, and on-chain data is transparent—but this very transparency makes it easier for professional traders to build systematic advantages. A quantitative wallet equipped with low-latency APIs and probabilistic models is not competing on the same field as an ordinary user who opens the app to place a bet only after seeing news.
According to Token Terminal data, Polymarket’s notional trading volume over the past 30 days was approximately $9.8 billion, with around 462,600 monthly active traders. The platform’s growth itself is not an issue, but there is an inverse relationship between user growth and user profitability—Sergeenkov’s data shows that the decline in the proportion of profitable traders directly correlates with peaks in user growth, particularly following the surge after the November 2024 U.S. election.
Information aggregation tool or zero-sum game?
This report has reignited an old debate: Who exactly do prediction markets serve?
The core argument of supporters is information aggregation. According to Polymarket’s official data, its price predictions have achieved over 94% accuracy one month before results are finalized. In other words, even though 84% of traders are losing money, the market as a whole continues to generate valuable probability signals. Retail traders who lose money are essentially paying for the pricing of information.
Critics argue that when 84% of participants on a platform lose money and profits are highly concentrated among automated traders, the distinction between such a platform and a casino is merely a semantic exercise in regulatory classification. Particularly in the realm of sports contracts, the boundary between prediction markets and sports betting is being deliberately blurred.
Polymarket's valuation has surpassed $20 billion, with Intercontinental Exchange (the parent company of NYSE) investing $2 billion in October 2025. Capital markets are clearly betting on the growth story of prediction markets.
But Sergeenkov’s report raises a simple question: What will be different for the next wave of 2.5 million users compared to the previous one?