Murad releases table of meme coin metrics to evaluate decentralization

Meme coin analyst Murad Mahmudov published a statistical table containing nine metrics designed to measure the level of decentralization in meme coins.

On November 29th, Murad unveiled what he called “the most important meme coin statistics chart I have ever compiled” in a recent X post. The table includes nine metrics that aim to evaluate the decentralization of the leading meme coins on the market.

“Measuring the decentralization of the best meme coins from nine different perspectives. “Blockchain doesn’t lie,” Murad said in his post.

This is THE MOST IMPORTANT Memecoin Statistics Chart I have ever compiled.

Don’t trust any ONE measurement? How about NINE?

Measuring the DECENTRALIZATION of the Best Memecoins from NINE different aspects.

Blockchain Doesn’t Lie. pic.twitter.com/DJ8awojWkR

— Murad 💹🧲 (@MustStopMurad) 28 November 2024

Meme coins have taken cryptocurrencies by storm, with viral coins such as GOAT(GOAT), POPCAT(POPCAT) and MOODENG(MOODENG) generating market caps ranging from thousands to billions of dollars. These coins attracted the interest of a wide range of investors, from experienced investors to newcomers.

However, there have been many cases in meme coin circles where the value of a token skyrocketed in a short period of time, only to fall just as quickly. When a dominant holder suddenly sells all of its shares, reducing the value, investors lose all the funds they invested in the token.

By measuring meme coin decentralization, Murad attempts to disprove the crypto community’s distrust of meme coins because they are seen as risky assets prone to large losses. The more decentralized a token is, the less chance investors have of being trapped by dominant holders looking to steal the token’s value.

What are Murad’s breast money measurements?

Murad’s table includes nine metrics he uses to measure decentralization. The first metric is the Median Holder Rank, which shows the rank of the average wallet holding the token. A lower ranking reflects a fairer distribution among owners and signals 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 indicates full centralization.

The third metric is the HolderScan Distribution Score, which evaluates the quality of token distribution. A higher score indicates better decentralization. The fourth, fifth, and sixth metrics highlight the percentage of tokens held by the top 100, 25, and 10 token holders, respectively.

The seventh and eighth metrics show the fraction of wallets holding more than $1,000 worth of tokens, expressed as a percentage and ratio. Finally, the ninth metric measures the percentage of new wallets created within the first week after a token’s launch. A lower percentage indicates healthier decentralization.

How do you apply metrics to meme coins?

Murad’s metrics serve as a guide to evaluate whether a meme coin is decentralized enough to warrant investment. Cryptocurrencies with lower HHI values, minimal owner density, and a higher number of $1K+ holders are generally more decentralized.

In contrast, high HHI values, significant concentrations among top holders, and high first-week wallet activity may indicate centralization and dominance of a few wallets.

For example, SPX6900(SPX), which many consider to be Murad’s favorite meme coin, has an average ownership rank of 181, an HHI of 29, and a concentration of top holders of 16.8%. In terms of decentralization, SPX6900 ranks highest.

Meanwhile, MOODENG(MOODENG) is at the bottom of the table because its median ownership rank is 19, its HHI is 303, and the concentration of top owners is 33.5%. This shows that MOODENG is more centralized than the metrics presented by Murad.