10x Research: Predict rapid market growth, top traders take advantage of information gaps to target retail investors

The prediction market has been growing rapidly recently, but research firm 10x Research warns that most retail investors in the market are actually more like gamblers participating in sports betting, pursuing dopamine stimulation far more than strategic analysis.

The prediction market has become a battlefield, and elite traders are sniping and chasing to stimulate retail investors

According to 10x Research, prediction markets are becoming a battleground between “well-informed top traders vs. dopamine-seeking retail investors.”

Among them, most retail investors are not doing disciplined trading, but “using dopamine and story emotions to take agency analysis”, so that a few professional traders who are really good at calculating probabilities and hedging risks can take advantage of information gaps to make profits.

10x Research emphasizes that the real source of profit is not the masses, but a few players who have information and can accurately capture the probability of events. They take advantage of price biases, misperceptions, and asymmetries in market structure created by retail investors to profit.

Retail investors generally lose money, with only 16.7% of wallets in profit

The study also points to a worrying phenomenon, which is that most Polymarket users lose money. According to Dune’s on-chain data:

Only about 16.7% of wallets are profitable.

The remaining 83% of wallets are in the red.

This also means that many retail investors think that prediction markets are very profitable, but in fact the losers are bigger than the winners. 10x Research believes that as market liquidity increases, it will attract more professional trading institutions to join and look for further arbitrage of the price gap left by retail investors.

The win rate is almost perfect, and concerns about insider trading in the default market are heating up

However, there are cases where there are wins and losses in the game, but there are cases in the prediction market that are more exaggerated than winning, and some accounts “win almost every game”, making the outside world wonder if they have inside information.

One of the users named pony-pony had the most eye-catching results. According to public information from Polymarket Money, his win rate reached 100%, with a cumulative profit of more than $7.7M, and his bets mostly revolved around OpenAI-related events.

Another user named AlphaRaccoon was also named. He had won 22 of 23 trades in a single day, making over $100k in a single day, with bets related to Google search trends. These almost win-win operations have once again led to discussions about whether the prediction market needs stricter risk control and information fairness mechanisms.

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