Amidst all the great news coming from the Ethereum camp, prominent crypto analyst and fund manager Adam Cochran recently posted his findings on Twitter in a long thread, about a manually performed audit of the top 10,000 Ethereum addresses. The audit revealed surprising findings about distributions, profitability, market sentiment and whale activity. The article attempts to present a brief summary of his invaluable analysis.
How Much Ethereum Is Contained In the Top 10,000 Addresses?
It was found in the audit that the top 10,000 addresses contain 91.7M ETH, the top 1,000 addresses manage around 70.7M. The top 100 addresses have 37.8M ETH. The top 10 addresses hold massive 16.6M ETH (roughly 17% of the total supply). The 10K wallets have an average Ethereum balance of 9170 ETH.
If we remove the smart contracts held tokens from the equation, the top 10,000 addresses represent 57.2M ETH, the top 1,000 have 42.5M ETH and the top 100 mange around 26.4M ETH.
Bitcoin and Ethereum – Decentralization
The audit showed that Bitcoin and Ethereum are widely distributed and truly decentralized, to an extent that other crypto-assets don’t come close to.
- Bitcoin (BTC) – Top 10,000 holders control 57.44% of the supply
- Ethereum (ETH) – Top 10,0000 holders control 56.70% of the supply
- Ripple (XRP) – Top 16 holders control 55.2% of the supply
- Bitcoin Cash (BCH) – Top 1100 holders control 56.8% of the supply
- Bitcoin SV (BSV) – Top 1250 holders control 55.6% of the supply
- Litecoin (LTC) – Top 300 holders control 54.3% of the supply
- Tron (TRX) – Top 1031 holders 51.1% of the supply
How Many ETH Tokens Actually Exist?
The total number of ETH tokens in existence is generally believed to be around 110M, however thats technical incorrect.Its a figure that indicates the total number of ETH tokens that ever came into existence and doesn’t include corrections for lost, burned or inaccessible tokens.
It was found in the analysis that 6.2M ETH tokens are confirmed burned and another 3.8M ETH tokens are likely burned or lost. It means that 9% of the supply is lost forever and the circulating supply should be considered to be around 100M tokens.
How Much Ethereum Can Be Staked In Total?
The analysis found out that only 44.6M ETH tokens (out of 110M absolute total) are in a state to be staked. This figure was determined after refining the data from all possible exchange held, smart contract locked and lost/inaccessible tokens. Once Ethereum 2.0 Phase 0 launches in July or August 2020 (Vitalik Buterin confirmed recently that the launch is well on track). Realistically, its not possible that all 44.6M tokens will be staked.
How Much Ethereum Will Likely Be Staked?
Mr Cochran used a slightly adapted standard distribution model to determine how much Ethereum will be staked in the launch time frame and after the product has matured. This is based on the finding that only 44.6M ETH can be staked in absolute total.
Based on the distribution model, there are likely to be:
- 2.5% innovators
- 13.5% early adopters
- 34% early majority
As per the model, innovators representing 2.5% of the staking base can put 1.15M ETH to use. Early adopters representing 13.5% of the staking base can stake 6M. Early majority representing 34% can do 15.1M.
It brings the total of the tokens which can be realistically staked in the 22.3M ETH tokens range (out of 44.6M ETH). The staking returns are likely to be 17-20% yield in the beginning, it will drop to 6-8% once staking services are common and accessible to most. It will level off at 4-6% once Ethereum 2.0 deploys completely, but that might be a couple of years away.
Ethereum Activity Level Is High
The top 10K wallets check revealed another interesting finding. ETH is surprisingly active and not idle. For instance, 64.53% of the Ethereum in top wallets has been on exchange or spent in the past 30 days. 14.02% was in cold storage (1year + idle), 9.71% was idle (1month – 1 year no activity) and 1.76% was locked in time locked contracts.
Existing Whales Are Growing
The level of activity is rising in the top accounts, compared to all addresses, indicating that the whales are accumulating more ETH. The existing whales have increased their position by 4% in the past 6 months ($550M inflow). The whales have purchased a total of 650M Ethereum in the last 6 months.
New Whales Are Coming
The top 10K addresses have significant number of new accounts making large scale purchases of Ethereum. These new addresses often bought $100,000 – $250,000 worth of Ethereum and represent about 6% of the top 10K addresses. The findings confirm that $100M Ethereum has been purchased in the last 6 months, by new large holders.
Unclaimed Ethereum Fortunes
The audit found that there are 347 genesis addresses in the top 10k wallets that failed to ever claim their tokens. These idle funds are 1.7M ETH and worth around 340M at the current price.
The Founders/Core Developers Confidence In the Project
The Ethereum founders, core developers and grant receivers display great confidence, regarding the state of things at Ethereum and in its future by still holding most of their funds (atleast 56.4% of their original Genesis ether). The genesis level buyers who claimed their funds (around 98%) still hold around more than 75% of the purchased tokens.
Ethereum And Bitcoin – Usage As Money
When it comes to usage, Ethereum is used 440x times more than Bitcoin for transacting. Since 16.2M ETH has been active in the last 90 days being used as money or gas. In contrast, only 65,160 BTC has been used for payments processing, in the same time frame.
Miners Are Accumulating
The top 10k wallets analysis also revealed that miners have started to accumulate Ethereum. In the past 6 months, miners have accumulated 1.15M ETH ($230M USD). This is the first time that miners have accumulated Ethereum in this manner or number. Mining operation has hard costs associated with electricity, rented space, computational hardware etc for which miners regularly need to sell to continue the operation. Its likely that mines are converting their mining operation to staking operation once Phase 0 goes live. However, the hording is limited to 20% of miners.
Exchange Deposits Are Increasing
In the past 6 months, exchange deposits grew 5x from 11,000 ETH per day to 55,000 ETH per day. This is usually associated with bear market or massive sell-off. But the large buyers are cushioning the sell pressure, The last 3 times the exchange deposits grew this way, they lead to market drops ~40% of the price. This is the only time that the opposite is happening.
Institutional Buyers And DeFi Growth Potential
There is another surprising development that big corporations and institutional players are buying Etheruem such as JPMorgan Chase, Reddit, IBM, Microsoft, Amazon and Walmart.
Currently, the DeFi services are used by 6% of the top 10K wallets. Since, most of the DeFi volume still comes from micro-wallets, there’s still great potential for growth, once the top holders kick in.