Research: Polymarket Only ~3% of Accounts Lead Price Discovery and Earn Over 30% Returns, While ~67% of Accounts Incur Full Loss

BlockBeats News, April 27th – A paper by researchers from London Business School and Yale University analyzed all Polymarket transactions from 2023 to 2025, finding that about 3% of accounts on the platform generated most of the price discovery. The study covered 1.72 million accounts, 210,322 markets, and approximately $13.76 billion in trading volume. The paper stated that only 3.14% of accounts could be classified as "skilled winners," meaning their order flow consistently predicted short-term price movements and final outcomes. These accounts, along with market makers, accounted for less than 3.5% of accounts but captured over 30% of all profits. Accounts classified as unlucky or unskilled losers made up 67% of the total, bearing all the platform's losses.

Regarding suspected insider trading, the authors identified 1,950 accounts that were active shortly before a single event, then went quiet after the event settlement. These accounts moved the price about 7 to 12 times more per dollar than skilled traders, but due to their focus on isolated events, failed to improve overall accuracy. The paper presented a case study focusing on three accounts opened between December 27th and January 3rd, which bet on Maduro's ousting before the U.S. military action was disclosed, yielding over $630,000 in profits. This incident aligns with the first insider trading lawsuit involving event contracts filed by the U.S. CFTC on Thursday, accusing U.S. Army Sergeant Gannon Ken Van Dyke of trading based on confidential information before the raid.