70% of Polymarket markets are dead zones: bots drain profits, and liquidity is illusory
My analysis of data on closed Polymarket contracts from 2021 to the end of May 2026 revealed a troubling disparity. About 70% of all completed markets on the platform failed to accumulate a trading volume above $10,000. This is not just a statistic — it is an indicator of a deep structural problem.
The volume distribution picture is extremely asymmetric. Less than 10% of closed markets showed a turnover in the range of $100,000 to $1 million. Moreover, nearly 45,000 contracts — roughly 5% of the total — recorded no trading volume at all. They were created but remained completely untraded.
Bots — the main beneficiaries of low-liquidity markets
The key conclusion I drew from studying on-chain activity is that automated strategies dominate the segment with a turnover of less than $10,000. Professor Joshua Della Vedova of the University of San Diego conducted an independent assessment and found that over 80% of all volume on these micro-markets is generated exclusively by bots. He identifies them as wallets making more than 50 transactions per day or over 1,000 trades in total.
Interestingly, bots earn on almost all markets, but their strategy is skewed toward large contracts. According to calculations, on markets with a turnover below $10,000, bots earned about $1.2 million. However, in the segment from $1 million to $10 million, their profit amounted to approximately $50.5 million. Markets with a volume exceeding $10 million brought bots an additional $35.1 million. This confirms the thesis: algorithms prefer high liquidity but do not neglect small contracts, squeezing profit from every trade.
The World Cup as a catalyst, but not a panacea
Against the backdrop of this stagnation, the 2026 FIFA World Cup caused a sharp surge in volumes. From June 1, the weekly turnover on major prediction platforms related to the tournament skyrocketed from $65 million to $5.4 billion, peaking at $5.6 billion in the week of June 22 to 28. The main driver was the Kalshi platform.
However, this success is localized. The bulk of liquidity is concentrated in a few popular contracts, while tens of thousands of other markets remain a "dead zone." This is a classic example of the "winner effect," where a single event masks a systemic problem with liquidity distribution.
My conclusion: Polymarket and similar platforms face a fundamental challenge. Growth in total volume driven by mega-events does not solve the "long tail" problem of thousands of low-liquidity and illiquid markets. As long as bots dominate this segment, genuine retail interest and deep liquidity remain an illusion. Without addressing this disparity, prediction markets risk remaining a niche tool for a narrow circle of professional arbitrageurs and algorithms.