Top Quant Trading Firms Move Into Prediction Markets Such as Polymarket
Prediction markets allow traders to wager on political, economic and sporting outcomes through event contracts, whose prices also reflect the market’s estimated probabilities. As liquidity on Polymarket and Kalshi rapidly expands, DRW, Wintermute and IMC are beginning to view prediction markets as a scalable asset class. Their focus is not on guessing outcomes, but on generating returns through market-making, market-microstructure and cross-platform arbitrage strategies.
CoinDesk reported on June 6, 2026, that DRW was assembling a dedicated trading desk, while Wintermute and IMC were also recruiting quantitative specialists in the field. OKX and Crypto.com were hiring at the same time. Polymarket’s 2025 trading volume was estimated at $22 billion–$40 billion. By the end of May, its UEFA Champions League, NBA championship and NHL Stanley Cup markets had generated more than $730 million in combined volume.
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The history behind this eventQuant Traders Use Mathematical Models to Reap Nearly $40 Million in Polymarket Arbitrage
Polymarket is a blockchain-based decentralized prediction market where contract prices are generally treated as the probability of an event occurring. Research found that the platform may not adjust prices simultaneously when markets have complex logical relationships, such as mutual exclusivity or inclusion. Quantitative traders can exploit those discrepancies by combining positions to lock in spreads, exposing a structural efficiency gap in Polymarket's pricing mechanism.
Research findings released as of July 2026 showed that traders used Bregman projections and the Frank-Wolfe algorithm to identify inconsistent probability pricing across Polymarket contracts and construct approximately risk-free arbitrage portfolios. The model estimated that such strategies generated close to $40 million in cumulative profit over the past year, indicating that the mispricing was not a short-lived anomaly confined to a single market.
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