Top N Holders Balance Ratio

Overview

Top N Holders Balance Ratio measures the percentage of a token's total supply held by the N largest wallet addresses. This metric quantifies wealth concentration within the token ecosystem, providing insights into ownership distribution and potential centralization.

Definition

This indicator is calculated by:

1. Ranking all wallet addresses by their token balance in descending order
2. Selecting the top N wallets based on the user-defined parameter
3. Summing the balances of these selected wallets
4. Dividing by the token's total supply and expressing as a percentage

Significance

• Concentration Risk Assessment: Reveals the degree of token supply centralization
• Whale Influence Measurement: Quantifies the potential market impact of largest holders
• Distribution Fairness Analysis: Provides context about the token's ownership spread
• Governance Control Indicators: Identifies potential voting power concentration

Interpretation

• High Percentage: Suggests significant centralization and possible manipulation risk
• Low Percentage: Indicates more distributed ownership and potentially healthier tokenomics
• Changes Over Time: Tracks whether token distribution is becoming more or less concentrated
• Comparison Across Projects: Benchmarks concentration against similar tokens or protocols

Analysis Applications

• Centralization Risk Evaluation: Assess vulnerability to large holder movements
• Governance Structure Analysis: Understand potential voting power distribution
• Tokenomics Health Assessment: Gauge token distribution fairness and sustainability
• Market Manipulation Risk: Identify tokens with concerning levels of concentration

Considerations

• Exchange wallets may represent many individual users but appear as single entities
• Smart contracts (staking, liquidity pools) may hold significant balances but serve different purposes
• A single entity might control multiple addresses, potentially understating actual concentration
• Recently launched tokens often show higher concentration that may decrease over time

Related Indicators

Parameters

This indicator uses the base parameters for time range and resolution settings, plus: