The biggest winners on the betting site Polymarket made 140 million dollars by simply reading the news faster than everyone else.
April 26, 2026
Original Paper
What Is the Alpha on Polymarket? A Methodology of Probability Mispricing and a Taxonomy of Eleven Profitable Regimes
SSRN · 6625018
The Takeaway
Profit in decentralized prediction markets comes from slow information assimilation rather than complex computer models. Many people assume that high frequency trading and sophisticated algorithms dominate these digital betting arenas. In reality, the most profitable strategy is knowing a basic fact a few minutes before the rest of the crowd. This edge accounts for the vast majority of total gains on the platform. Human speed and awareness remain more valuable than technical complexity in modern markets.
From the abstract
A companion to "Smart Money on Polymarket" (Paper I), this paper asks a sharper, methodological question: what is the alpha? We argue and document that every profitable wallet in our N = 273 panel is running the same underlying strategy-probability mispricing arbitrage-differing only in (i) which part of the price spectrum the mispricing lives, and (ii) what generates it. We formalise the unifying framework, decompose the eleven empirical regimes documented in Paper I onto four alpha sources-slo