Murad Unveils Comprehensive Meme Coin Decentralization Metrics

Meme coin analyst Murad Mahmudov has released a new statistics table featuring nine key metrics designed to assess the decentralization of meme coins. The table, unveiled on November 29, 2024, aims to provide a comprehensive view of the distribution and decentralization levels across top meme coins, offering a way to evaluate their risk profiles in terms of centralization.

The Importance of Decentralization

In his post on X (formerly Twitter), Murad emphasized that the blockchain "doesn’t lie" and highlighted the importance of decentralization in meme coins to prevent rug-pulls, which have plagued the market. Rug-pulls typically occur when dominant holders dump their large token holdings, causing the price to crash and leaving investors with significant losses. By measuring decentralization from multiple angles, Murad seeks to help traders and investors better understand the structural integrity of meme coins before investing.

"The blockchain doesn’t lie," Murad stated, revealing the nine metrics he believes are crucial for evaluating meme coin decentralization.

The Nine Metrics

Murad's table introduces nine distinct metrics to evaluate meme coin decentralization, each providing a different perspective on token distribution. These include:

• Median Holder Rank: This metric shows the rank of the median wallet holding the token. A lower rank indicates a more equitable distribution among holders, which is a sign of better decentralization.

• Herfindahl-Hirschman Index (HHI): A measure of ownership concentration, with a lower score indicating higher decentralization. An HHI score of 10,000 signifies complete centralization.

• HolderScan Distribution Score: This score evaluates how evenly tokens are distributed among holders. A higher score indicates better decentralization.

• Top 100 Holders: The percentage of tokens held by the top 100 largest holders.

• Top 25 Holders: The percentage of tokens held by the top 25 largest holders.

• Top 10 Holders: The percentage of tokens held by the top 10 largest holders.

• $1K+ Wallet Holders: The percentage of wallets holding more than $1,000 worth of the token.

• Ratio of $1K+ Wallets: The ratio of wallets holding more than $1,000 worth of the token.

• First-Week Wallet Creation: This measures the percentage of new wallets created within the first week of a token's launch. A lower percentage suggests healthier decentralization.

Applying the Metrics to Meme Coins

Murad's metrics offer a framework to evaluate whether a meme coin is decentralized enough to warrant investment. Coins with low HHI values, less concentration among top holders, and a larger number of $1,000+ wallets tend to indicate better decentralization. On the other hand, coins with high HHI values, significant concentration in the hands of a few top holders, and higher levels of wallet creation in the first week may suggest centralization and more risk.

For example, SPX6900, which is favored by Murad, ranks highly in decentralization with a median holder rank of 181, an HHI score of 29, and a concentration of 16.8% held by top holders. This indicates a healthy decentralization profile.

In contrast, MOODENG ranks lower in decentralization with a median holder rank of 19, an HHI score of 303, and a concentration of 33.5% among top holders, signaling that it is more centralized according to the metrics.

Conclusion

Murad’s new table of meme coin decentralization metrics provides a valuable tool for investors looking to navigate the high-risk world of meme coins. By analyzing these nine key metrics, investors can better assess the decentralization of meme coins, helping to identify potentially safer assets and avoid the risks associated with heavily centralized tokens.