Nice paper, and thanks for releasing the dataset.
The "top-1% winners are patient limit-order liquidity providers, not insiders" finding is interesting, and I'd love to see it extended cross-venue.
I work on tooling that normalizes orderbooks across Polymarket, Kalshi, Limitless, and Smarkets. From that angle, a lot of what looks locally like skilled Polymarket market-making turns out to be cross-venue arbitrage that happens to land on Polymarket. The same underlying question routinely trades 3-8% apart across venues for hours at meaningful depth, and a fast multi-venue stack rests limits on the lagging book at the exact moments the leading book moves. Locally that's indistinguishable from disciplined liquidity provision; cross-venue it's closer to FX triangular arb on the consensus price.
If your timestamps are fine-grained enough, a clean follow-up: for the top 1% of Polymarket profit-takers, what fraction of fills land within N seconds of a same-question move on Kalshi or Limitless? If it's materially above baseline, some of "skill" resolves into "cross-venue infrastructure" — which is also a more durable edge than within-venue alpha, so it could partly explain the weak monthly persistence you observe (the cross-venue gap closes when too many players run the same stack).
This might also be consistent with your insider-trading conclusion rather than against it: an insider on a real-world event has every reason to hit the lowest-friction venue with aggressive market orders (Polymarket: permissionless wallets, no KYC, no withdrawal limits). That's a fundamentally different profile from the patient limit-posting strategy your top bucket runs, so the two populations cleanly separate in the data even if both are present.
I couldn't make heads or tails of that prose.
because it's AI slop
We have a grad student working on matching markets across venues. Not a trivial task at scale, but we hope to look at that eventually.
I'd be very cautious how matching works. For some markets like sports it's trivial, but many politics or economics markets have minute rule differences that dramatically change what the actual market is betting on. Many markets have identical titles but are actually totally different markets.
I don't know why cross venue arbitrage would be unskilled? There's a lot of it for the taking and I, and others, do so.
I don't think that's surprising because the alternative would be that some people are able to predict the future. Whatever strategy one might figure out that works is long term destined to fail, as other people start using them. The only real way to make money there is by providing liquidity since it's a zero sum game. For the stock market this is not true because it's not zero sum, it grows over time.
There is alternative to being “able to predict the future”, which is “I already know the future” or “I can change the future”
Someone flips a coin and looks at it, what orders are you willing to put in?
The potential for insiders should be represented by a complete loss of liquidity.
And yet, many people bet on things like the duration or contents of press conferences, of pre-taped shows, etc.
There are some bets on prediction markets where the future is either already known or in the control of people who may be participating in the market. For example, when people bet on how long the next presidential briefing will be, it doesn't take a prophet to predict this, anyone who organizes said briefing can control it (at least with a very high probability).
So, the question becomes "what is the preponderence of such bets" and "how many people with control or knowledge of bet outcomes actually participate in the market" - not "can some people see the future of any bet better than others".
"predicting the future" and "correct analysis of all available information" often aren't all that different.
A sufficiently large market is indistinguishable from Brownian motion.
That's a model.
From Schlock Mercenary (quoted from memory, may be inexact):
"You cannot see the future. All we are given is the present."
"Of course. But if you look closely at the present, you can find loose bits of the future just laying around."
Not really. Not all players in prediction markets are rational players. A good chunk of it are there for entertainment, and analyze things incorrectly; you can take the other side of those trades, and you won't need to predict the future.
Deciding that someone else's prediction is wrong is a prediction in and of itself.
Yes, but the alternative (that some people are very good at forecasting) is also plausible. It's also useful to have a good prediction model and timely data sources when providing liquidity. We also find that some of the "biggest losers" also provide liquidity; they just aren't as good at it.
The stock market is arguably zero sum as well, just that directionally betting on the US has generally worked during the golden years of the US economy.
The stock markets of the world aren't a money printer.
The stock market is not in the least zero sum. That's just a fundamental misunderstanding. There's dividends, capital allocation, etc.
There is only so much real money in the world, and that is determined by the Treasuries and Feds of the world. There are only so many dollars that were ever created, so many Japanese yen that were ever created, and so many Turkish lira that were ever created.
The stock market is a wealth redistribution mechanism, not a money printer. Market caps going up are not equal to money being created. It's not like the shareholders could collectively cash out all of that market cap and spend it. If everyone sold all of their stocks and pulled fully out of the stock market until everything crashed to $0, everyone's cash would still sum to whatever the government printed.
They can be in cases where investment lenders don’t have 100% capital requirements, but that’s generally no different from other banks.
There's probably also some hedging going on across accounts that look like directional bets.
this comment was clearly written by AI. please don't do that.
Yes, there's an em-dash, but it reads fine to me.
AI slop is often good at "reading fine" but the actual content is incoherent.
Not sure why you were downvoted/flagged, because you're right. It is also quite an insightful comment worthy of discussion so I'm a little conflicted.
It looks completely fine and plausible to me. Which is worrying.
I don’t see why it’s AI, but even if it is, it’s better than most human comments so the complaint should be downvoted.
Take a look at the user's history, it's more obvious in context. It has a lot of claude-specific tells which are noticeable if you've spent time working with claude. AI-generated comments are against the HN guidelines https://news.ycombinator.com/newsguidelines.html#generated
phrenology
SamTinnerholm started to consistently use emdash in their comments starting 11 days ago, before that none of their comments used emdash.
LLMs like emdash very much, humans don't use it very much these days.
if you're not able to tell that OP's comment was AI slop, then you probably don't have much insight to contribute to the conversation either.
not AI slop, simply a copy paste if the abstract of the paper. journals in our field limit the allowed number of words, so the style can feel « unnatural » even when human-written
Forget to swap accounts?
The abstract doesn't mention arbitrage at all
Maybe the guidelines should be changed? Something about: don’t complain about comments just because they’re AI.
I'm not complaining "just" because it's AI.
I'm complaining because it's AI, and also slop.
> resolves into "cross-venue infrastructure" — which is also a more durable edge than within-venue alpha
anybody who actually trades knows that on these markets, "cross venue infrastructure" (aka vibe coding some exchange api integrations) is much less important / durable than actual alpha.
That sounds plausible. Not a trader so I wouldn't know. Saying at least a little about what's actually wrong with it seems more useful than just saying it's slop, which gives me very little info over just a downvote.
it's pretty easy to write basic trading api connectivity. the hard part is knowing what trades to send
even if we are very charitable and assume the comment refers only to like high-engineering-effort infra for trying to be super competitive on latency, that's still like the opposite of a durable edge, since everybody is looking at it. there's very little "hidden" knowledge and it's mostly a matter of elbow grease and careful engineering.
Slop aside, do you think it's reasonable to assume a decent fraction of those making consistent profits are arbitrage bots?
arbitrage is a rather overloaded word that people use for all kinds of strategies but yes, I predict most of the most profitable and consistent accounts are not actually attempting to forecast the outcome of these markets from first principles
Yes, just like the "don't say HN is becoming reddit" rule. If you think it's AI downvote or flag and move on, reading "this is AI" over and over all over the internet without any substantiation is tiresome.
it's only "better than human comments" if you have no idea what profitable trading looks like. it's a very-very thin mildly convincing veneer over what is fundamentally slop.