SolScan and BaseScan Reveal Centralization Risks in Crypto Tokens with 60%+ Holder Concentration

A critical step in evaluating the risk profile of a cryptocurrency token involves analyzing its holder distribution through on-chain data platforms like SolScan and BaseScan, which provide transparency into ownership concentration and liquidity risks. These tools enable investors to assess whether a token is distributed across numerous addresses or dominated by a few large wallets, a metric that directly impacts market stability and susceptibility to manipulation [1]. A token with a high degree of centralization, such as one where the top 10 holders control over 60% of the supply, raises significant red flags due to the potential for price manipulation or sudden liquidity drains [1].

On SolScan, users can input a Solana-based token’s mint address to access a "Holders" tab that lists the largest addresses and their respective ownership percentages. For example, a SolScan analysis of USDC on Solana reveals the percentage of tokens held by exchanges, team wallets, or individual addresses, allowing investors to identify potential vulnerabilities [1]. Similarly, BaseScan, which serves Base and Ethereum Layer 2 tokens, offers a "Holders" section that breaks down token ownership, including charts and transaction histories to track whale activity [1]. These tools also allow users to verify whether large token holders are labeled as verified exchanges (e.g., Binance or Coinbase) or unidentifiable wallets, further contextualizing the risk level [1].

Whale concentration is particularly concerning when paired with suspicious transaction patterns. Sudden large transfers from a whale address to an exchange, identical balances across multiple wallets, or infinite profit indicators (often seen in airdropped tokens) suggest potential manipulation or premeditated dumping [1]. For instance, a wallet showing "∞" as its profit/loss on SolScan may indicate it received tokens via a marketing airdrop or team allocation, which could later be liquidated en masse [1]. Investors are advised to cross-check these patterns with project documentation, such as vesting schedules for team or developer tokens, to ensure compliance with announced release timelines [1].

Decentralized tokens typically exhibit broader distribution, with thousands of small holders rather than a handful of large entities. A rule of thumb is to consider tokens with top-10 holder ownership exceeding 50% as highly centralized, whereas popular tokens often maintain top-10 concentrations below 30% [1]. Monitoring vesting schedules is equally vital; unexpected large transfers from team wallets, especially before scheduled unlocks, signal potential violations of project commitments [1]. Tools like Tokenomist provide additional oversight by tracking scheduled unlocks, but for custom tokens, on-chain explorers remain the primary verification method [1].

To effectively vet a token, users should systematically review holder count, top wallet percentages, and transaction histories on SolScan or BaseScan. Suspicious flows, such as rapid token exchanges between wallets or circular transfers, may indicate wash trading or coordinated dumping. By leveraging these tools, investors can mitigate risks associated with hidden liquidity threats or sudden price volatility, ensuring informed decision-making in an increasingly complex market [1].

Source: [1] How To Vet a Token’s Holder Distribution with SolScan and BaseScan, [https://nulltx.com/how-to-vet-a-tokens-holder-distribution-with-solscan-and-basescan/](https://nulltx.com/how-to-vet-a-tokens-holder-distribution-with-solscan-and-basescan/)