Lenalidomide or Observation in Treating Patients With Asymptomatic High-Risk Smoldering Multiple Myeloma

Inclusion Criteria: * Patients must be diagnosed with asymptomatic high-risk smoldering multiple myeloma (SMM) within the past 60 months, as confirmed by both of the following: * Bone marrow plasmacytosis with \>= 10% plasma cells or sheets of plasma cells at any time before initiating study treatment, including a marrow which must be obtained by bone marrow aspiration and/or biopsy within 4 weeks prior to randomization * Abnormal serum free light chain ratio (\< 0.26 or \> 1.65) by serum free light chain (FLC) assay; FLC assay must be performed within 28 days of randomization * Patients must have measurable levels of monoclonal protein (M-protein): \>= 1g/dL on serum protein electrophoresis or \>= 200 mg of monoclonal protein on a 24 hour urine protein electrophoresis which must be obtained within 4 weeks prior to randomization * Patients must have no lytic lesions on skeletal surveys and no hypercalcemia (i.e., \>= 11 mg/dL) * Hemoglobin \>= 11 g/dL within four weeks prior to randomization * Platelet count \>= 100,000/mm\^3 within four weeks prior to randomization * Absolute neutrophil count (ANC) \>= 1,500/mm\^3 within four weeks prior to randomization * Calculated creatinine clearance \>= 30 mL/min within four weeks prior to randomization * Bilirubin =\< 1.5 mg/dL within four weeks prior to randomization * Serum glutamate pyruvate transaminase (SGPT) (alanine aminotransferase \[ALT\]) and serum glutamic oxaloacetic transaminase (SGPT) (aspartate aminotransferase \[AST\]) =\< 2.5 times upper limit of normal within four weeks prior to randomization * No prior or concurrent systemic or radiation therapy for the treatment of myeloma * Concurrent use of bisphosphonates is not permitted; however, prior bisphosphonates or once-a-year intravenous bisphosphonate given for the treatment of osteoporosis is permitted * Prior or concurrent use of erythropoietin is disallowed * Prior glucocorticosteroid therapy for the treatment of multiple myeloma is not permitted * Prior systemic glucocorticosteroid use for the treatment of non-malignant disorders is permitted; concurrent use after registration on the study should be restricted to the equivalent of prednisone 10 mg per day * Prior or concurrent topical or localized glucocorticosteroid therapy to treat non-malignant comorbid disorders is permitted * Patients must not have active, uncontrolled seizure disorder; patients must have had no seizures in the last 6 months * Patients must not have uncontrolled intercurrent illness including uncontrolled hypertension, symptomatic congestive heart failure, unstable angina, uncontrolled cardiac arrhythmia, uncontrolled psychiatric illness or social situation that would limit compliance with the study, or a prior history of Stevens Johnson syndrome * Eastern Cooperative Oncology Group (ECOG) performance status 0, 1, or 2 * Patients must not have baseline bone lesions or plasmacytomas * Patients with monoclonal gammopathy of undetermined significance are not eligible * Patients must not have grade 2 or higher peripheral neuropathy * Patients must not have active, uncontrolled infection * Patients may have a history of current or previous deep vein thrombosis or pulmonary embolism but are required to take some form of anti-coagulation as prophylaxis if they are not currently on full-dose anticoagulation * Patients should not have New York Heart Association classification III or IV heart failure * Patients with a history of prior malignancy are eligible provided they were treated with curative intent and have been free of disease for the time period considered appropriate for cure of the specific cancer; for most diseases this time frame is 5 years * Patients should not be felt to have an immediate need for chemotherapy * Females of childbearing potential (FCBP) must have a negative serum or urine pregnancy test with a sensitivity of at least 25 mIU/mL within 10 - 14 days prior to and again within 24 hours of starting cycle 1 of lenalidomide and must either commit to continued abstinence from heterosexual intercourse or begin TWO acceptable methods of birth control, one highly effective method and one additional effective method AT THE SAME TIME, at least 28 days before she starts taking lenalidomide; FCBP must also agree to ongoing pregnancy testing; men must agree to use a latex condom during sexual contact with a FCBP even if they have had a successful vasectomy; a FCBP is a sexually mature woman who: 1) has not undergone a hysterectomy or bilateral oophorectomy; or 2) has not been naturally postmenopausal for at least 24 consecutive months (i.e., has had menses at any time in the preceding 24 consecutive months); all patients must be counseled by a trained counselor every 28 days about pregnancy precautions and risks of fetal exposure * Human immunodeficiency virus (HIV) infection is not excluded; HIV+ patients must meet the following criteria: * Cluster of differentiation (CD)4 cell count \>= 350/mm\^3 * No history of acquired immune deficiency syndrome (AIDS)-related illness * Not currently prescribed zidovudine or stavudine