Blockchainanalyst defioasis.eth released data showing that roughly 70% of Polymarket's1.7 million trading addresses have recorded realized losses, mirroring the lossrates long documented among retail CFD traders in traditional markets.Theanalysis examined realized profit and loss across Polymarket's entiretrading history through December 28, covering 1,733,785 unique addresses. Only30% of participants have managed to lock in profits, while the remaining 70%sit in negative territory.Extreme ProfitConcentration Echoes Traditional MarketsThe datareveals a winner-takes-all dynamic virtually identical to CFD tradingplatforms. Fewer than 0.04% of all Polymarket addresses captured over 70% oftotal realized profits, accumulating roughly 3.7 billion dollars in gains. Thisconcentration ratio closely parallels what regulators observe in leveragedretail trading, where European brokers report 62% to 82% of accounts losingmoney.Mostprofitable Polymarket users earned modest amounts. Addresses with realizedprofits between zero and 1,000 dollars represent 24.56% of all participants butcaptured just 0.86% of total gains. Earning more than 1,000 dollars requiresbreaking into the top 4.9% of all addresses.The modelappears to be proving itself. Polymarket is currently eyeing a valuation of about$15 billion, and together with Kalshi, its largest competitor, the twoplatforms generated nearly$7.5 billion in combined trading volume in October alone, driven mainly bysports-related contracts (or, to put it plainly, betting).Thesefigures are likely to keep rising. Polymarket has received the green light toreturn to the U.S. after its platform was blocked in 2022 and has justlaunched an application dedicated specifically to the U.S. market.Small Losses Common, ButCatastrophic Failures ExistOver 1.1million addresses, representing 63.5% of all participants, recorded realizedlosses between zero and 1,000 dollars. However, 149 addresses each lost morethan 1 million dollars, demonstrating that while most users lose small amounts,the platform can deliver severe losses to unlucky or unsophisticatedparticipants.Themethodology tracks total sale proceeds plus redemption amounts minus purchasecosts, excluding unrealized gains or losses on open positions. Defioasis.ethacknowledged limitations in the approach, noting that "the actual data canonly be used as reference, pure on-chain data calculations have certainlimitations, and may not have filtered out some official unlabeledcontracts."Whenquestioned about the 3.7 billion dollar profit figure by other analysts,defioasis.eth defended the calculation by comparing it to similar platforms:"Actually it's not exaggerated at all, Pump Fun's Net PnL at thathistorical retrospective point was 3.8 billion."Markets Change, RetailLosses Don'tThesimilarity between Polymarket's 70% loss rate and the 70-80% failure ratesmandated for disclosure by ESMA-regulated CFD brokers highlights a persistentreality: regardlessof asset class or market structure, retail participants consistently subsidizemore sophisticated players.Whethertrading currency pairs, stocks via CFDs, or political outcomes on blockchainprediction markets, roughly seven in ten retail accounts end up losing money.We can see that also in the boomingretail prop trading industry."Whetherit's prediction markets or Meme, there seems to be no difference for us retailinvestors,” added the analys.He alsohighlighted that Polymarket has become another venue where informationasymmetry and automated market makers dominate, with one commenter describingit as "a new meat grinder" where "cognitive gaps, informationgaps, insider manipulation make it normal for newcomers to find it difficult toprofit."The analystagreed with this assessment, noting that automated trading bots andsophisticated market makers turn casual participation into an expensiveeducation.This article was written by Damian Chmiel at www.financemagnates.com.