A mysterious Dogecoin whale holds 36 billion tokens or more than 27% of the entire DOGE supply, according to data from blockchair. In fact, the top 20 addresses control 50% or half of DOGE’s supply. With a single address controlling holding 27% of all DOGE, whale price manipulation is also possible. The cryptocurrency was even previously slapped with such allegations.
Large DOGE Holdings Makes It Centralized
On Feb. 4, Binance CEO Changpeng Zhao highlighted Dogecoin’s wealth concentration. Amid tech billionaire Elon Musk’s endorsement on Dogecoin, Zhao cited some potential risks for DOGE investors. Based on its distribution, Zhao believes that Dogecoin is kind of centralized.
Some pros/risks of #Doge.
Pros: Cool, fun, PR manager @elonmusk. Decentralized in the sense there are no "core team". It's abandoned.
— CZ 🔶 Binance (@cz_binance) February 4, 2021
Zhao stated that he has no idea who owns a large concentration of DOGE supply. He added that it could be exchanges or even mining pools, as Dogecoin shares hash power with Litecoin (LTC).
Besides, through a process called merge mining, miners of Litecoin provide security for the Dogecoin network. Hence, it’s possible that the DOGE whale addresses could be Litecoin miners or pools.
Zhao went on to note that the project had been abandoned. The lack of a core team could be seen as a positive since development is distributed. The CEO of Binance even jokingly called Musk the PR manager of Dogecoin, given his tweets or endorsement sends the cryptocurrency on a spike.
DOGE Soared to More Than 800%
Besides, the GameStop stock (GME) short squeeze with the coordinated DOGE price pump has also encouraged new investors to take a look. With the suspension of GME trading, retail traders recently turned their attention to DOGE.
Despite DOGE’s perceived fairness of being a distributed project and high-profile endorsements, the cryptocurrency might mask the unfair wealth concentration.