Polymarket Study Reveals Price Discovery Dominated by Minority of Traders

A recent working paper analyzing Polymarket trades from 2023 to 2025 has revealed that a small fraction of traders are responsible for the majority of price discovery. According to NS3.AI, the study examined data from 1.72 million accounts and a trading volume of $13.76 billion. It found that only 3% of traders significantly influence price movements, while the remaining 97% primarily provide liquidity and tend to incur losses overall. Additionally, trades based on non-public information have a more pronounced impact on prices per dollar traded.