Data Reveals 70 Percent of Polymarket Trading Addresses Incur Losses
New statistical analysis released in late December 2025 has provided a sobering look at the profitability of decentralized prediction markets, revealing that the vast majority of participants on Polymarket are currently trading at a loss. According to recent data from DefiOasis, approximately 70% of the 1,733,785 unique trading addresses on the platform have recorded negative realized returns. This high failure rate underscores the significant challenges inherent in prediction markets, which function as zero-sum environments where for every winning bet, there must be a corresponding loss. The report highlights that while the platform has processed over $9 billion in total volume and successfully predicted major geopolitical events, the financial benefits of these insights are concentrated among a very small fraction of the user base.
Extreme Profit Concentration Among a Tiny Elite of Traders
The most striking finding in the year-end report is the extreme concentration of wealth at the top of the Polymarket leaderboard. A mere 0.0385% of the most profitable addresses account for over 70% of the total profits generated on the platform, amounting to a staggering $3.7 billion. This elite group includes sophisticated traders like the French investor “Théo,” who reportedly earned over $85 million by leveraging specialized “neighbor effect” polling during the 2024 US election cycle. For the vast majority of “winners,” the gains are far more modest, with nahead 25% of profitable addresses earning less than $1,000. This disparity suggests that while Polymarket is an effective tool for aggregating public sentiment and forecasting outcomes, it operates similarly to professional trading venues where information arbitrage and high-frequency strategies—such as microstructure arbitrage—are the primary drivers of significant wealth accumulation.
Retail Participation and the Psychology of Prediction Losses
On the opposite side of the profit spectrum, over 1.1 million addresses have realized losses, with the majority of these users losing amounts not exceeding $1,000. Analysts suggest that these retail participants often treat the platform more as a form of social engagement or ideological expression rather than a disciplined investment vehicle. This mirrors historical trends viewn in retail stock trading, where a large influx of new participants often leads to uneven results and steady, small-scale losses for the average user. Despite the high loss rate, the platform continues to grow in influence, recently securing a $2 billion investment from Intercontinental platform that values the company at $9 billion. This institutional backing indicates that the underlying value of the data generated by these markets remains high, even if the individual participants frequently find themselves on the wrong side of the probability curve.
