Polymarket Paradox: 70% of markets are dead, while bots rake in millions
The decentralized prediction market is experiencing a paradoxical moment. On one hand, high-profile events like the 2026 FIFA World Cup are pumping platforms with billions in volume. On the other, deep data analysis reveals a shocking picture: the vast majority of markets on Polymarket are essentially dead zones, where liquidity is absent and activity is simulated by bots.
Numbers Don't Lie: The Liquidity Iceberg
My analysis of closed Polymarket markets from 2021 to May 2026 revealed an extremely uneven distribution of volume. About 70% of all closed contracts accumulated a trading volume of less than $10,000. Moreover, nearly 5% of markets—over 45,000 contracts—recorded no trades at all. Less than 10% of markets showed volume in the range of $100,000 to $1 million.
This indicates that the bulk of capital flows not to the platform as a whole, but into a handful of large, hype-driven contracts. The remaining thousands of markets exist only nominally, creating an illusion of an active ecosystem.
Bots: The Main Beneficiaries of "Empty" Markets
Who is trading on these illiquid markets? The answer is automated bots. Joshua Della Vedova, a business professor at the University of San Diego, conducted a detailed study and found that over 80% of volume on markets with turnover under $10,000 is generated exclusively by bots. These algorithms, executing more than 50 trades per day or 1,000 over their lifetime, profit from each transaction.
Based on the data, I estimate that bots earned about $1.2 million on markets with turnover below $10,000. However, their true target is large contracts. The segment with volume between $1 million and $10 million brought bots $50.5 million, accounting for 38% of their total profit. Markets with volume over $10 million added another $35.1 million in bot profits. As Della Vedova notes, bots profit on virtually all markets but clearly prefer large ones, though they trade across the entire spectrum.
The World Cup as a Catalyst and Distortion
The 2026 FIFA World Cup has become a powerful growth driver for prediction markets. Since June 1, weekly volume on major platforms related to the World Cup surged from $65 million to $5.4 billion, peaking at $5.6 billion in the week of June 22-28. The main contributor was the Kalshi platform, which clearly demonstrates that major sporting events can quickly ignite interest in prediction trading.
However, this surge only underscores a fundamental problem: the bulk of money concentrates in a few popular contracts, while tens of thousands of others are barely traded. A similar situation with low-liquidity markets is observed on Kalshi, confirming the systemic nature of the phenomenon.
My conclusion: Polymarket and similar platforms have not yet created a truly deep and diversified market. We are seeing a "winner-takes-all effect"—where all volume and profit go to a handful of contracts, while the ecosystem as a whole remains fragmented and illiquid. Without solving this problem, prediction markets risk remaining a niche pastime for bots and hype chasers, rather than a full-fledged financial instrument.