Open source blockchain analytics firm Moonstream released a report that found that around 17% of addresses control more than 80% of all NFTs on Ethereum.
The report was published on October 21, and the analysis was conducted on more than 7 million NFT transactions on the Ethereum blockchain between April 1 and September 25, 2021.
The report found that whales, NFT platforms and exchanges, which make up the top 16.71% of all addresses, own 80.98% of the NFTs on Ethereum.
The remaining 83.29% of NFT owners were only able to get hold of “a handful of tokens” during this period.
“The latter statistic, however, requires a little more nuance to interpret as many of these owners are marketplaces and clearinghouses like OpenSea, Nifty Gateway, and other platforms of the same type,” said Moonstream.
The numbers seem to conform to the Pareto Principle or the 80/20 rule which is a common factor in different markets and sectors. The principle is based on the idea that about 80% of the consequences come from 20% of the causes.
“Fascinating to see how the Pareto principle has more or less asserted itself in a market as avant-garde and traditionally ‘irrational'”, Reddit user “xddemonesque” comments on the report.
Moonstream’s dataset focuses on ERC 721 tokens and does not contain data from Layer 2 networks such as Polygon, nor does it obtain data from centralized application programming interfaces (APIs).
“Our scan of these 1,145,767 blocks revealed transfer activities for 7,020,950 tokens from 9,292 NFT contracts for 727,102 addresses. These coins and transfers form the core of the data set, ”the report said.
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While Moonstream highlighted the “great inequality” of NFT ownership at Ethereum, the company also argued that the NFT market is still open enough for retail investors to participate, pointing out that the majority of NFT owners are small Time traders are able to manage their assets with relative ease:
“This data shows us that the Ethereum NFT market is open in the sense that the vast majority of its participants are small buyers who are likely to make their purchases manually. There are few barriers to entry for those wishing to enter this market. ”