Meme coin analyst Murad Mahmudov published a statistics table showcasing nine metrics designed to measure the level of decentralization of meme coins.
On November 29, Murad unveiled what he called “the most important coin “statistics table I’ve ever compiled” in a recent article
“Measuring the decentralization of major coins from nine different angles. Blockchain doesn’t lie,” Murad said in his job.
https://twitter.com/MustStopMurad/status/1862190404960915538
Meme coins have taken the crypto sphere by storm, with viral coins like GOAT (GOAT), POPCAT(POPCAT), and MOODENG (MOODENG) generating market capitalizations ranging from several thousand to several billion dollars. These coins have attracted a wide range of investors, from seasoned traders to newcomers.
However, there have been many cases of tug-of-war in coin circles, where the value of a token skyrockets in a short period of time only to fall just as quickly. Traders end up losing all of the funds they have invested in the token when a dominant holder suddenly sells their entire stake, causing the value to plummet.
By measuring the decentralization of meme coins, Murad attempts to demystify the crypto community’s distrust of meme coins because they are seen as risky assets prone to big losses. The more decentralized a token, the less likely it is that investors will be pulled in by dominant holders seeking to deprive the token of its value.
What are the stats for Murad’s meme coins?
Murad’s table presents nine indicators that he used to measure decentralization. The first metric is the Median Holder Rank, indicating the rank of the median wallet holding the token. A lower rank reflects a more equitable distribution among incumbents, signaling better decentralization.
Next is the Herfindahl-Hirschman Index which measures ownership concentration on a scale of 0 to 10,000. A lower score indicates higher decentralization, while a score of 10,000 means complete centralization.
The third metric is the HolderScan distribution score, which evaluates the quality of token distribution. A higher score denotes better decentralization. The fourth, fifth, and sixth metrics highlight the percentage of tokens held by the 100, 25, and 10 largest holders, respectively.
The seventh and eighth metrics show the share of wallets holding more than $1,000 worth of token, expressed as a percentage and ratio. Finally, the ninth metric measures the percentage of new wallets created in the first week after a token launch. A lower percentage indicates healthier decentralization.
How do you apply metrics to meme pieces?
Murad’s metrics serve as a guide for assessing whether a coin is decentralized enough to warrant investment. Coins with low HHI values, minimal holder concentration, and a higher number of holders over $1,000 are generally more decentralized.
In contrast, high HHI values, significant concentrations among top holders, and high portfolio activity in the first week may signal centralization and dominance of a few portfolios.
For example, what many consider to be Murad’s favorite coin, the SPX6900 (SPX), has a median holder rank of 181, an HHI of 29, and a concentration of 16.8% of top holders. In terms of decentralization, the SPX6900 ranks first.
Meanwhile, MOODENG(MOODENG) sits at the bottom of the table because it has a median holder rank of 19, an HHI of 303, and a concentration of 33.5% of top holders. This indicates that MOODENG is more centralized, based on the metrics proposed by Murad.