Bitcoin (BTC) is often criticized by Ethereum evangelists and altcoin enthusiasts for its minuscule number of addresses controlling roughly 87% of the total circulating supply.
However, a new report by digital asset research company Delphi Digital reveals that over 80% of Ethereum’s total circulating supply is held by only 7,572 addresses. Shockingly, Ethereum’s disbursement of funds suffers the same wealth concentration issues as Bitcoin.
Deep Analysis of Ethereum’s Total Circulating Supply and Addresses
Per the report, over 80% of Ethereum’s total circulating supply are held by addresses with a balance higher than 1,000 ETH. The number of these addresses holding over 1,000 ETH is just 7,572. To put this number of addresses in perspective, there are nearly 60 million distinct Ethereum addresses.
Breaking down these addresses in terms of volumes of ETH they contain, the digital asset research company reveals that 6,490 addresses hold between 1,000 and 10,000 ETH, 923 of them hold between 10,000 and 100,000 ETH, 155 between 100,000 and 1,000,000 ETH and only 4 between 1,000,000 and 10,000,000 ETH.
Therefore, based on the data above, Ethereum’s total circulating supply is heavily concentrated. While this may be troubling to some people, it’s important to remember that this is the case in all financial systems. Bitcoin and basically every other cryptocurrency have a high level of concentration with their circulating supply.
This is also the case with regards to fiat currencies, in which the world’s richest 1% hold 50.1% of the world’s wealth, up from 45.5% in 2001. As the saying goes, “the rich get richer and the poor get poorer.”
2% of Ethereum’s Total Supply Present in Dapps
In addition to revealing the concentration of Ethereum’s circulating supply, Delphi Digital also revealed that as of March 3, 2019, over 2.3 million Ethereum (ETH) (about 2% of the total circulating supply) was present in decentralized financial applications.
According to Delphi Digital, 98% of this 2.3 million ETH is staked in MakerDAO smart contracts, which is the governance model surrounding the creation and destruction of Maker’s decentralized stablecoin, the Dai token (DAI).
The 2nd-largest financial application with the most staked ETH is the decentralized lending platform Compound, which holds roughly 28,500 ETH as of March 3, 2019.
More Revelations from Ethereum’s Data
Apart from what’s already been mentioned, Delphi Digital revealed that after each of the past 5 hard forks, the price of ETH dropped an average of 19% over the following 30 days.
Ethereum recently underwent the Constantinople and St. Petersburg hard forks on February 28, and the price has barely changed thus far. At the time of writing, Ethereum (ETH) is currently at $133, which is just over 2% down from $138 at the time of Ethereum’s most recent hard fork.
The report suggests that Ethereum is maintaining a more stable price after its recent hard fork because it implemented a decrease in block rewards from 5 ETH to 3 ETH.
However, it has only been 11 days since the hard fork, so only time will tell if ETH will decrease, maintain, or increase in price.
What do you think about Ethereum’s total circulating supply being highly concentrated among 7,572 addresses? Will Ethereum’s price drop around 19% by the end of March? Let us know what you think in the comment section below.