A Tuesday report from 10x Research has characterized prediction market users as behaving more like sports bettors than disciplined traders. The firm said participants are prioritizing dopamine and narrative over discipline and analytical edge.
Accuracy and profit generation stem from a small, informed group that prices probability and extracts value from retail-driven longshot positions, according to the analysis. The report described prediction markets as an emerging battleground where sophisticated traders compete against casual retail participants.
Professional trading desks are increasing their prediction market involvement as liquidity and retail participation grow. The market structure creates opportunities to capture spreads and exploit information disparities.
User Profitability and Suspicious Activity
Dune blockchain data shows 16.7% of Polymarket wallets are profitable. The remaining 83% have recorded losses since beginning activity on the platform.
Some accounts maintain flawless records, raising questions about potential insider advantages. Polymarket user pony-pony shows a 100% win rate with over $77,000 in realized gains from bets on OpenAI-related events, according to Monday data from Polymarket Money.
AlphaRaccoon generated over $1 million in a single day by winning 22 of 23 bets on Google search trends. The near-perfect success rate has triggered concerns about information asymmetry among certain participants.
Data Discrepancies and Bug Fixes
A Paradigm researcher identified a bug affecting Polymarket data displayed on third-party dashboards. The error double-counts trading volume across multiple metrics.
Storm, the Paradigm researcher, wrote Tuesday on X that the bug inflates both notional volume and cashflow volume. Notional volume tracks contract quantities traded, while cashflow volume measures dollar values at trade execution.
The inflated figures result from data interpretation errors rather than wash trading, Storm clarified. Wash trading involves entities trading the same instrument repeatedly to create false impressions of market activity.
AlliumLabs and DefiLlama have confirmed the bug's existence. Both platforms are updating their Polymarket dashboards to eliminate the double-counting issue, adding uncertainty to the reliability of prediction market activity metrics.