$1,000 turns into $2,000,000: The smart money's arbitrage secret in prediction markets

【Blockchain Rhythm】 Recently, a fascinating case has gone viral—a smart money address engaging in market prediction operations that are practically textbook-level arbitrage.

This address, known as “RN1,” started trading on Polymarket at the beginning of the year with an initial capital of only $1,000. The result? It has now accumulated over $2 million in profits, more than a 2,000-fold increase.

Even more astonishing, this individual isn’t relying on some mysterious predictive ability but is engaging in high-frequency trading arbitrage. Data shows that he participated in over 13,000 prediction trades this year, mainly focusing on sports prediction markets. The most impressive single trade? A profit of $129,000 in one shot.

Where’s the real trick? According to seasoned trading analysts, RN1’s profit method is to exploit the time difference of the platform’s automated market makers—arbitraging at the moment when prices haven’t fully synchronized. In other words, he’s not betting on the outcome of events but leveraging the market’s microstructure to “cut leeks.” This is why he can consistently profit without relying on exceptional prediction skills.

This also gives us an insight: in decentralized prediction markets, the true profit opportunities often lie not in predicting the event itself but in a deep understanding of market mechanisms and rapid capture of price asymmetries.