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Inside Chainlink’s extremely top-heavy distribution

Photo of: Joseph Stone
by Joseph Stone

1% of wallets alone hold no less than 80% of all LINK tokens. According to Glassnode, this centralization of cryptocurrencies between a few holders has been increasing over the last 2 years.

In terms of overall capitalization, LINK currently occupies 8th place in the hierarchy of cryptocurrencies. Last summer, the coin was however in the crypto top 5 by marketcap thanks to an upward trend.

Since then, crypto has been in retreat in the hierarchy of altcoins. But is an increase still possible? It will probably depend on the activity of a limited number of Link token holders.

According to a new study by Glassnode, this cryptocurrency is indeed characterized by a very high concentration. The company even qualifies the level of centralization of the Link as a record. More than 80% of the tokens do not reside in exchanges.

On the contrary, about 1% of Chainlink wallets or wallets hold about 81% of all available tokens. In absolute value, this represents 125 wallets, accounts qualified as whales.

Moreover, Glassnode notes, these whales have been accumulating an increasing number of Link tokens for the past two years. Etherscan data confirms this trend, notes Cointelegraph. They indicate that 82.7% of the LINK are held by only 100 portfolios.

This represents minus 0.03% of the addresses holding LINK. Another major indicator of cryptocurrency is the number of active addresses. Glassnode estimates this number at 12,500 addresses. As a consequence, 83% of the tokens reside in 0.8% of active wallets.

The whales on Chainlink therefore seem to accelerate the centralization of cryptocurrencies since July 2019. At that time, 1% of token holders accounted for 53% of the total Link supply. In 18 months, this share jumped to 81%.

According to Liesl Eichholz from Glassnode, the “bullish sentiment” remains strong among veteran Chainlink traders. “The continued concentration of supply suggests that even with the increase in available supply, the main LINK holders are still optimistic and continue to acquire more,” he analyses.

At the same time, the Chainlink team is reselling a significant portion of its own tokens. In the last 100 days, 52 million LINKS have left Chainlink’s team reserve wallets.