A new on-chain analysis has shown that the majority of addresses on the Polymarket platform end up at a loss: 70% of users did not achieve net profits. The study is based on approximately 1.7 million unique addresses and records an extremely uneven distribution of income among participants.
Profitability Crisis on Polymarket
The main conclusion of the analysis is that only about 30% of addresses close positions with a net positive result, while 70% remain at a loss. At the same time, the overall profit profile appears unusually concentrated: a small portion of users accumulates a significant share of the income, whereas the majority receive relatively modest gains.
Distribution of Profits and Losses
Data shows that less than 0.04% of addresses attracted over 70% of all realized profits, with total recorded profits amounting to $3.7 billion. Simultaneously, 63.5% of all profitable addresses earned between $0 and $1,000, illustrating the dominance of small winnings among most successful participants.
Large losses in the analyzed sample are rare: just over 140 addresses suffered losses exceeding $1 million. This statistic indicates that large-scale financial disasters on the platform are not widespread, but the presence of such cases highlights risks for individual participants.
Understanding Prediction Markets
Prediction markets operate as follows: users buy and sell positions tied to event outcomes, and profit arises from accurately assessing probabilities and strategically closing positions. Prices on such platforms reflect the collective probability estimates, and profit requires skill in buying low and selling high as market expectations shift.
For a general introduction to how prediction markets work, you can check the material on what prediction markets are, which explains how prices reflect participant forecasts and what factors influence price changes.
Expert Context and the Future of Decentralized Platforms
The analytical signals recorded on Polymarket generally correlate with observations of widespread unprofitability among retail participants in other crypto industry segments. A similar issue of losses among a broad user base can be compared with data on losses among Ethereum holders, for example, as detailed in losses among Ethereum holders.
Beyond market mechanisms, user risks are also influenced by platform operational factors: account vulnerabilities and external incidents can exacerbate losses. Details on related security risks are covered in the material about Polymarket account hacks.
Why This Matters
If you mine at home or manage a farm of several devices, you should not expect this statistic to directly affect mining profitability: this concerns prediction markets, not energy consumption or hash rate rewards. Nevertheless, the findings are useful for understanding general risk attitudes and capital management.
The concentration of profits and prevalence of losing addresses remind us that in the crypto ecosystem, profitability is often determined by skills, information, and capital size—not just access to tools. This is important to consider when allocating funds among mining, trading, and participating in DeFi.
What to Do?
- Assess risk management: limit amounts you are willing to lose in speculative instruments and keep reserves for mining operational expenses.
- Keep funds separate: maintain mining capital separately from funds used for prediction markets and other speculation.
- Learn and test strategies with small amounts: before scaling positions in new instruments, validate your approach on small volumes.
- Monitor security: use reliable keys and providers, since security incidents can amplify financial losses.
These practical steps will help minimize risks when interacting with prediction markets and maintain mining income stability, even if you decide to experiment partially with trading or betting.