Dismantling 112,000 Polymarket addresses: 1% of real money is doing these five things

by darkzodchi

== sync, corrected by elderman ==

Yeah11.2 million Polymarket wallets, 6 months of chain dataA rather intuitive but surprising result emerges from a systematic combing and analysis。About 87.3% of users' transactions on the platform ended in lossesI don't know。

The statistics cover a number of critical dimensions, including transaction records, transaction volumes, winnings, gains and losses, type of market involved, time of entry and size of warehouse space per chain. The whole data-processing process lasted three weeks, and finally it came to conclusionsIt's not like many people's instinctsI don't know。

Many believe that the highest players in the forecast market often have some obvious advantage, such as insider information or the use of poorly known complex computing models. But in terms of data performance, this is not the case。And that 1% of top players keep on doing a few things for a long time and repeatedly. And the other 99 percent of the users tend to do the exact opposite, and then wonder why their money is running out。

Polymarket's ranking is highly misleading

If Pollymarket's ranking is opened and ranked by profit (PnL) now, some anomalies are actually found. For example, the first wallet, with a total of 22 silos; the fourth wallet, with only 8 transactions; and the eighth wallet, with only one bet, can still be among the top 10 in history。

It's really hard to call them real traders. In many cases, it is only some giant whales who have a one-time bet of more than $5 million on a single event, with the result that the bet is right; it may also involve people with an information advantage, or even both。in either case, however, data on only a few transactions are virtually impossible to provide any learning patterns. this result is more like &ldquao, which is very large; coins &rdquao; rather than a replicable strategy。

The first step in the analysis was therefore to filter out the noise data and retain only samples of real statistical significance. The screening criteria include the following:

• At least 100 cleared warehouses to ensure that the number of samples is statistically significant
• The transaction is active for a period of not less than four months, excluding accounts that are won only by one chance
• (b) Participation in at least 2 different markets to avoid single events being charged
• The total volume of transactions exceeded $10,000, ensuring that participants actually invested funds。

under these conditions, the original 112,000 wallets were screened, leaving only about 8,400 wallet addresses with sufficient data value. this 8,400 addresses are really researchable data sets, not & ldquo, which makes millions of dollars, and hero accounts & rdquo, which rank on the list. the common feature of these addresses is the continuity of transactions and the stability of data, from which it is easier to observe real patterns of behaviour。

Interestingly, when the screening is completed, the real most stable traders are completely different from the profile. They are not visible, and most have never even heard of their names。They usually make between $50,000 and $500,000, not millions。

But the real concern is not how much they earn, but the process and method behind them. Because what is really replicable is never the result, but the process。

Three common error areas to break

Wrong one: top traders win between 80% and 90%

That is not the case. Based on selected samples of data, instead of the whale accounts on the top of the list, which are earned by a single betMost of the real long-term profitable wallets won between 55 and 67 per cent。In other words, even the top traders would be miscalculating a significant proportion of the transactions. For example, an address has completed more than 900 closed positions, with a cumulative profit of $2.6 million, but only 63 per cent. In other words, more than a third of his bets were wrong, but he was still predicting huge gains in the market。

The obsession with success is often a trap that is the easiest to step on by first-hand accounts。A lot of rookies like to buy a $0.90 contract because it looks like & ldqua; it's safe & rdqua; The probability of YES is already 90%, and it seems that the result is almost certain, so it's bought with 0.90, and ultimately, if the event actually occurs, it only earns 0.10. But once there's a miscalculation, there's a direct loss of 0.90, with a risk return of 9 to 1. This pattern is repeated enough and the account will soon be depleted. In the data concentration, this has been repeated on hundreds of sites。

Miss 2: The strongest traders do everything

The truth is the opposite。The best-performing wallets are usually only available in up to three categories of markets, with most focusing on one or two areas。some address only predicts events related to encrypted currency; some participate only in weather-like markets; even one address is almost exclusively traded “ bitcoin reaches a certain price &rdquo by friday; this type of problem。

In predictive markets, excessive fragmentation often means lower quality of judgement. Broad-based participants tend to perform well, while highly focused participants are more likely to sustain profits。

Zone three: Speed determines everything

This is true only in very few cases. For example, some of the 15-minute encrypted markets do require rapid response. In most markets, however, top traders do not rely on speed to win. It's more common for themWe'll build a warehouse in a few days or weeksI don't know. They are not eager to hit speed with others, but rather patiently wait for a marked deviation in prices. When prices deviate to a sufficient level, overall mathematical expectations remain in their favour even if the market takes two weeks to correct them。

Five trade models worth learning

Mode 1: Counter-trading in extreme emotions

This is the whole data setMost visible, most stableThe profit signal. Of the 8,400 wallets screened, this behaviour is almost the primary indicator of long-term profitability。

WHEN A CONTRACT WAS PUSHED UP TO 88 PER CENT BY THE MOOD OF THE MARKET, MANY TOP WALLETS STARTED SELLING YES; AND WHEN THE PRICE FELL TO ABOUT 12 PER CENT, THEY STARTED BUYING. OF COURSE, THIS IS NOT BLINDLY COUNTERPRODUCTIVE, NOR ARE THEY OPPOSED TO MARKETS IN ORDER TO OPPOSE THEM. THEY WILL ONLY ENTER ON A LARGE SCALE IF THEY ARE JUDGED TO BE CLEARLY OVERREACTING TO MARKET SENTIMENT。

this strategy is effective because of a classic phenomenon, namely & ldquo; hot-cold-door deviation ” this phenomenon was discovered as early as the '40s in the simabo study and emerged in the markets in which almost all humans participate. in short, people tend to overestimate “ it seems almost certain that &rdquo will occur; the results are underestimated while the small probability event is underestimated。

Further statistics also show that the top 50 wallets, the average entry price usually deviates from the market consensus probability of 6 to 11 per cent. They..Instead of taking part in a 50-50 bet, you wait patiently until the odds are clearly in your favorI don't know. This may seem boring, but in long-term data it is stable and extremely profitable。

Mode 2: The warehouse management approach is very close to the Kelly formula

the size of the silo of the wallet, which ranked the top 200 for profit, can be compared to the &ldquao; the implicit advantage &rdquao; when compared, there is a clear correlation. in other wordsThey don't just bet, the size of which changes almost in proportion to what they think they haveThat is, when they consider the advantage to be high, the position will be significantly greater; if the advantage is smaller, the position will be smaller; and if there is no obvious advantage, there will be no trade。

It is difficult to determine whether these traders have actually read the Kelly Creterion formula, or whether this instinct has developed in the context of long-term losses and actual combat. But mathematically, their behavior is very close to Kelly's formula。

kelly formula usually writes: f* = (p & tmes; b & minus; q) / b, where: p indicates the probability that the transaction believes the event to be real; q = 1 & minus; p; b indicates the rate of return (potential gain & risk;)

to give a simple example, it is assumed that a trader judges that an event has a 60 per cent probability of occurring, while the market price is $0.45. the rate of return is: b = (1 / 0.45); & minus; 1 & asymp; 1.22, after the formula is replaced: f* = (0.60 & times; 1.22 & minus; 0.40) / 1.22 & asymp; 0.272. in other words, the whole kelly strategy suggests that 27% of the money be committed to this deal。

However, this practice is highly risky in actual transactions, with a very high volatility rate, and it is likely that the accounts will be drawn into a significant fallback at short notice。In terms of data, real-profit wallets usually use a more conservative version, close to a quarter of the Kelly formula. In other words, if the whole Kelly formula suggests a 27% bet, they usually only place about 7%。

Among the most assured trading opportunities, the position may rise to 12 to 15 per cent; the chances of medium confidence are usually only allocated 2 to 5 per cent; and without a clear advantage, they often choose not to participate directly。in contrast, loss accounts usually fall into two extremes. either you put 80% of the money in a single transaction, relying entirely on luck; or you spread $10 into 40 or 50 markets, which you think is & ldquo; spread risk & rdquo; in practice, however, this is more like a constant payment of fees, making the accounts seem busy。

Mode three: highly focused professional transactions

When 112,000 wallets are divided according to the market category in which they are involved, the differences can be clear. These categories include encrypted markets, political events, sports events, weather, geopolitics, entertainment and science. The analysis revealed that:

• The average of PnLs involved in one to two types of wallets is approximately US$ + 4200
• Participating in 3 to 4 types of wallets with an average PnL of approximately $380
• The average of the wallets involved in more than 5 categories is about $2,100。

This relationship is almost linear。The more market categories are involved, the higher the probability of loss。

The information systems relied on in different categories of forecast markets are completely different。ENCRYPTION MARKETS ARE OFTEN INFLUENCED BY SUCH FACTORS AS EXCHANGE FLOWS, WHALE ADDRESSES, FINANCIAL RATES, ETC.; POLITICAL MARKETS RELY ON OPINION DATA, GRASS-ROOTS NEWS, PARLIAMENTARY AGENDAS, ETC.; AND WEATHER MARKETS RELY MORE ON NOAA WEATHER MODELS, ATMOSPHERIC DATA AND SATELLITE OBSERVATIONS。

Two cases are particularly representative。Case I:Wallet A trades a forecast market of 15 minutes of bitcoin and never participates in other types of markets, such as “ will BTC be higher than a price &rdquo in the next 15 minutes? A total of 502 forecasts were completed, with 98 per cent success and a cumulative profit of approximately $54,000. The advantage is that it's really very simple, and it's just to keep monitoring the depth of the Binance order book, which is quickly traded when the price of Polymark is 10 to 30 seconds behind. That is to say, it has been repeated hundreds of times after just a few seconds of poor information。

Case II:Wallet B only participates in weather-like markets. The trade strategy is also straightforward, reading NOAA's daily publicly available temperature prediction data, and comparing it with Polymarket's market pricing. If there is a marked deviation in market prices from these decades-old supercomputer forecasts, they are traded directly. The accuracy of this address reached 94 per cent in the New York temperature forecast market alone。

It needs to be stressed that these people are not geniuses. The real point is that they find an area of subdivision that they know better than the normal Polymarket participants, and then repeat the advantage。THERE HAS BEEN NO FREQUENT CHANGE OF STRATEGY, NOR HAS THE CREATION OF FOMOS DUE TO MARKET HOT SPOTS. THE SAME LOGIC HAS BEEN IMPLEMENTED OVER AND OVER AGAIN AROUND THE SAME ADVANTAGE。

Mode IV: Price fluctuations, not event outcomes

Most Polymarket users do so in a very simple way, buying contracts and holding them until the event settlement, either for profit or loss, a typical binary result。But the top purse is completely different。Many times, they buy $0.40, and when news or market sentiment pushes prices to $0.65, they sell out. They do not care whether the event actually happened, and as long as the price already reflects new information, they complete the transaction and exit。

In the data concentration, some of the best-performing addresses did not even have a settlement slot. They have never held the contract to final settlement, but have continued to carry out price mismatched band transactions. StatisticsThe average holding time for top wallets is usually between 18 and 72 hoursAnd 50% of the wallets that are behind us are usually held until the settlement, sometimes for weeks or months。

This does not mean that holding to settlement is necessarily wrong. Sometimes, when judgements are very certain, long-term possession is indeed a better strategy. However, in terms of overall data, the use of top-level wallets is more proactive and flexible than most people think. They andNot a passive bet, but a real traderI don't know。

Mode 5: Always avoiding breaking news

Intuitively, we always believe that the most sensitive funds should come in the first place in the event of an emergency, such as military conflict, election results and the resignation of corporate executives. However, the data shows that there is no such thing as a "no"Top wallets tend to take the initiative to avoid the time the news broke outI don't know. They usually wait for emotional capital to flow into the market, allowing prices to fluctuate significantly in a short period of time, and for market sentiment to stabilize before trading。

From the data set as a whole, a very clear pattern is:The best trading opportunities tend to occur before the market is aware of events or after an overreaction of market sentiment。And when everyone is talking about the same thing, it's often the worst entry time. Market prices are generally already highly effective at this time, and the advantages are minimal。

Five point operation advice

Select a track and focus for a long time

whether it be encryption, politics, weather or sports, it is possible, but it is important to choose one of the areas in which you are most familiar. only this type of market is traded for at least three months. there are no exceptions, nor should there be any involvement in other popular events as a result of a sudden rise. even if it was just & ldquo; a hand-held election & rdquo; it was easy to break the original system of judgement。

Record every prediction

Prior to each transaction, several key data were written, including the real probabilities of its own judgement, current market prices, expected advantages and the size of the planned input, to be reset when more than 50 transactions were accumulated. For example, if some predictions are marked as 70% probability, is the actual hit rate really close to 70%. In the event of a significant deviation, which indicates a deviation in probabilistic judgement, calibration must take place prior to the expansion of the position。

Silo management as close to a quarter of Kelly's formula as possible

first calculate the theoretical space given by kelly's formula, then divide it by four. this figure usually appears to be small, but that is the key to risk control. the result is often only one — — account silo。

Only when the advantage is obvious

If the expected advantage is less than 8% to 10%, just give up. Even if it seems attractive, learn to wait. The best-performing wallets in the data are usually only 2 to 3 transactions per market category per week. The quality of transactions is much more important than the volume of transactions。

Keep records and resets

Establish a complete transaction form to record each transaction, the results and the problems that arise. The wallets, with their long-term upward growth, almost systematically reset their own mistakes, while those that are stagnating or even losing tend to repeat the same mistakes and attribute the results to bad luck。