Measuring Token Holder Concentration
Calculate top-holder shares with explicit supply and address rules, and avoid treating custody wallets or contract holdings as individual owners.
Overview
When translating these concepts into an integration, keep the scope described by the wallet history api with the result. The examples in wallet transaction history and smart contract event logs show how the same distinction affects neighbouring data questions.
Holder concentration describes how balances are distributed across the selected address set. Interpretation depends on supply definition and on what large addresses represent.
Choose the denominator
Use a stated total, circulating or observed-holder supply basis. Declare exclusions such as burns, treasury or contract positions. A custody wallet can aggregate many beneficial owners, while one owner can split balances across addresses. Address concentration is therefore not automatically person-level ownership concentration.
Worked example: a top-ten share
The ten largest included addresses hold forty million units against an included denominator of one hundred million. Their address-based share is forty percent. If a large custody address represents many users, the same number should not be described as ten people controlling forty percent. Preserve classifications as dated evidence or explicit assumptions.
Test coverage and scaling
Include incomplete holder enumeration, token rebases and a zero denominator. Keep exact units before computing percentages. Publish both raw address-based results and any separately adjusted view. Changes in address labels or exclusions can move the metric without any token transfer, so version the methodology and explain revisions.
A practical acceptance test
Give the top ten included addresses forty million of a one-hundred-million denominator. Assert forty percent under that definition, while retaining a custody classification as context rather than ten-person proof. Change an exclusion without transferring tokens and verify that the metric revision records the methodology change instead of inventing market activity.
Questions about the topic
Frequently asked questions
Does a large address identify one person?
Not necessarily; it can be custody, a contract or another aggregate.
Can changing exclusions change the metric without transfers?
Yes. The denominator and included set are part of the method.
Standards & technical documentation