Author: Deep Tide TechFlow
Deep Tide Guide: The latest analysis of 2.5 million wallet addresses on Polymarket by on-chain researcher Andrey Sergeenkov shows that 84.1% of traders are at a loss, with only 2% of addresses accumulating profits exceeding $1,000, and 840 addresses (0.033%) profiting over $100,000. The timing of this report is quite delicate—Polymarket has just secured an exclusive predictive market partnership with MLB for up to $300 million and is pushing hard for retail user growth.
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 covering 2.5 million Polymarket wallet addresses, with data as of April 1, 2026. The core conclusion: 84.1% of traders are losing money, and less than 16% of addresses have achieved any level of positive returns.
This is not the first such study. In December 2025, blockchain analyst DeFi Oasis analyzed 1.7 million addresses and 124 million transactions, concluding that 70% of traders were not profitable. Sergeenkov's data sample is larger, and the methodology has been improved (capturing token splits and merges missed in previous research), with the loss ratio jumping from 70% to 84%.
The Top of the Pyramid: Less Than 0.26% Earn Over $5,000 Monthly
Sergeenkov conducted a full analysis of transaction data from two smart contracts, CTF Exchange and NegRisk CTF Exchange, by tracking all USDC fund flows (including buys, sells, redemptions, splits, and merges) on the Polygon chain.
The numbers in the high-profit range are quite stark: addresses with average monthly profits exceeding $1,000 account for 1.25%; those exceeding $5,000 are only 0.26%, about 6,600 addresses; and those exceeding $10,000 drop to 3,250, representing 0.13% of all traders.
More critical is the issue of sustainability. Among those 6,600 addresses with average monthly profits exceeding $5,000, 53% were active for one month and then disappeared, with only 2.6% trading continuously for over a year. Sergeenkov summarized in the report: "Most traders come, trade for a while, and then leave."
In contrast, bottom-feeders consistently harvest profits. An academic paper from Spain's IMDEA Networks Institute analyzed 86 million on-chain transactions between April 2024 and April 2025, finding that arbitrage traders extracted approximately $40 million in profits just from price differences. A single wallet achieved the highest profit of $2 million from 4,049 transactions, averaging $496 per trade.
Retail Manual Trading Can't Beat Bots, Information Advantage Highly Concentrated
The root cause 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. Manual retail traders typically enter the market only after prices have already adjusted.
This is the fundamental difference between prediction markets and traditional gambling. Polymarket's order book is completely public, and on-chain data is transparent, but this transparency instead makes it easier for professional traders to build systematic advantages. A quantitative wallet equipped with low-latency APIs and probability models is not in the same arena as an ordinary user who opens the app to place a bet after seeing the news.
According to Token Terminal data, Polymarket's nominal trading volume over the past 30 days is approximately $9.8 billion, with about 462,600 monthly active traders. The platform's growth itself is not an issue, 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 related to peaks in user growth, especially the influx 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. Polymarket's official data claims that its price prediction accuracy exceeds 94% one month before the outcome is determined. In other words, even if 84% of traders are losing money, the market as a whole is still producing valuable probability signals. The losing retail traders are essentially paying for information pricing.
Critics argue that when 84% of a platform's participants are losing money and profits are highly concentrated in the hands of automated traders, the difference between it and a casino is merely a matter of regulatory classification. Especially in the realm of sports contracts, the line between prediction markets and sports betting is being deliberately blurred.
Polymarket's valuation has exceeded $20 billion, and the Intercontinental Exchange (parent company of the NYSE) invested $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: when the next wave of 2.5 million users floods in, how will their fate differ from the previous wave?
