@clarejennings
Excessive token concentration—when a small group of wallets holds most of the circulating supply—creates systemic risks that eventually surface in market behavior. Such concentration increases the likelihood of manipulation, sudden dumps, and suppressed price discovery. Traders often monitor on-chain distribution metrics to evaluate decentralization. Prices may appear stable until one major holder decides to exit, triggering outsized volatility. Moreover, concentrated supply discourages retail or institutional confidence, limiting sustainable growth. Healthy ecosystems gradually diversify ownership through incentives, liquidity programs, and utility expansion. Markets price in this risk by assigning discounts to heavily concentrated tokens over time.
0 reply
0 recast
0 reaction