- Decentralised Finance soared high this year with a new all-time high at $4.23 billion in terms of total value locked in DeFi.
- A new analysis revealed that not all the tokens are being distributed uniformly among its users.
- Conti, the co-founder of DeFi Italy, revealed that only 500 different addresses hold up to 90% from nearly every DeFi project out there.
DeFi, short for Decentralised Finance, soared high this year with a new all-time high at $4.23 billion in terms of total value locked in DeFi. However, a new analysis revealed that not all the tokens are being distributed uniformly among its users.
Simone Conti, Head of Digital Asset Investment of CryptoLab, has recently shown his analysis regarding DeFi distribution in his tweet. Conti, the co-founder of DeFi Italy, revealed that only 500 different addresses hold up to 90% from nearly every DeFi project out there. He concluded that this figure rises to 99% in the case of three of the DeFi projects.
I want to share my personal analysis regarding #DeFi Token Holders. Considerations:
– Projects born before #DeFi 've more holders for the airdrops
– Almost all projects've 30% of their supply held by Top 5 holders and 90% by Top 500 (some of them ~100%)
— Simone Conti (@simoneconti_) August 6, 2020
DeFi Tokens Distribution
According to the charts provided by Conti, Compound is the most concentrated of the Top 10 projects he examined, with 96% total supply being held by a few dozen people from the top 50 holders.
Conti reported that five addresses hold over 40% of the majority of DeFi’s respective total supplies. Bancor is the only anomaly in this even when the top 5 addresses hold 33% of the supply.
Conti also observed that older projects are much more distributed in total supply than the new ones, which indicates that DeFi’s growing popularity has attracted large investors.
A Tricky Task to track
Tracking of token distribution remains a tricky task as different analysts produce a wide range of figures based on the criteria on which addresses to include.
Spencer Noon, head of DTC capital, believed that $YFI has already become the most decentralised DeFi project within two weeks of its entry.The combined ownership percentage of top 5 addresses is according to Noon are as follows : $COMP (64.6%), $BAT (24.5%), $MKR (23.5%), $ETH (12.9%) and $YFI (9.5%).
While this marked as contrast regarding Conti’s evaluation that YFI’s top addresses hold almost 60% of the total supply. Hence, it became quite debatable regarding the analysis. Conti announced that he would share future research when he goes more in-depth in the context. He will consider issues regarding reported tokens listed in severals Cex/Dex representing large amounts for his subsequent analysis.
DeFi is making efforts to bring Decentralized governance and fair distribution. It automated the process of yield farming, which became its rocket fuel. Liquidity pools appear to be adding value and increased utility to numerous DeFi platforms. YFI and other governance tokens are operated by particular communities, which is a positive step for DeFi as it further democratizes the crypto space.