How distribution is measured
Two numbers decide whether a token's utility is active. Both are read from on-chain state and both are re-evaluated continuously.
1. Distinct holder count
The number of distinct addresses holding a non-zero balance of the token. The creator sets a minimum at launch — anywhere from 50 to 5,000 holders. Dust balances below a small floor are ignored so that a token cannot be inflated with balances of one wei.
2. Single-wallet concentration cap
The largest single address balance as a percentage of total supply. The creator sets a maximum at launch, typically between 1% and 20%. If the biggest wallet exceeds that cap, the token is locked regardless of how many holders it has.
Both must be true, continuously
Utility is active only while the holder count is at or above the threshold and the largest wallet is at or below the cap. Cross either line in the wrong direction and the utility re-locks automatically. Cross back and it re-activates. Nobody signs off on this; it is read from chain state.
Known limitation: sybil / fake distribution
A creator can airdrop supply across hundreds of wallets they secretly control. On-chain, that looks identical to genuine wide distribution: many distinct addresses, no single large holder. The utility would unlock even though one person effectively controls the token.
This is a real, only partially mitigated problem. We are not claiming to have solved it. Do not treat an "unlocked" badge as proof that a token is genuinely community-held.
What partially helps today
- Dust floors. Wallets below a minimum balance don't count toward the holder total, so faking distribution costs real supply rather than nothing.
- The concentration cap. To fake wide distribution, an attacker must actually break their holdings into many wallets, which means they can no longer move supply from one address without visibly changing the numbers.
- Public visibility. Holder breakdowns are shown on every token page, so suspicious patterns — hundreds of wallets with identical balances funded in one block — are visible to anyone looking.
What is still a work in progress
- Minimum value per wallet scaled to make faking expensive rather than merely inconvenient.
- Wallet-age and activity heuristics — discounting freshly created addresses, or addresses funded from a single source.
- Funding-graph clustering to detect wallets that all trace back to one funder.
None of these are live at launch, and none of them fully solve sybil resistance even when they are. Read the risk disclosure for what that means for you.