In crypto, decentralization is often treated as a philosophical ideal. But beneath the slogans and whitepapers, decentralization can — and should — be measured.
Let’s look at Ethereum, the second-largest cryptocurrency by market cap and the leading Layer 1 for smart contracts. Today, the top 9 ETH-holding entities include centralized exchanges (Coinbase, Binance, Bitfinex), custodial platforms (Robinhood, Grayscale ETF), bridges (Base), and synthetic tokens (Wrapped ETH). Combined, these 9 entities collectively control over 19% of the total ETH supply.
And that’s excluding the Beacon Chain deposit contract — which currently holds over 30 million ETH (~25%) locked for proof-of-stake validation. If you include that, Ethereum’s structural centralization becomes even more apparent.
Now contrast this with Kaspa — a relatively new Layer 1 protocol with no staking, no wrapped assets, and no DeFi bridges yet. As of today, the top 10 Kaspa holders control just 16.9% of total supply.
What This Says About Decentralization
Ethereum has achieved massive utility and adoption, but much of its supply is now parked in centralized or semi-centralized entities. As institutions, custodians, and ETFs grow their footprint, the decentralization narrative becomes more difficult to defend at the base layer.
Kaspa, by contrast, is still early in its lifecycle. It hasn’t faced the same pressures of DeFi expansion or ETF exposure. But that’s exactly what makes its current distribution noteworthy: its monetary base is still held across a wider range of wallets, with no smart contract or financial abstractions pulling large amounts of supply into centralized contracts.
Ethereum continues to lead in developer activity, tooling, and institutional presence, but it also shows signs of structural centralization that can’t be ignored.
Kaspa, while earlier in development, presents a contrasting model, one that starts with decentralized coin distribution as a baseline and avoids early dependence on wrapped assets or financialization.
Looking Ahead
The real question is: Can Kaspa maintain this decentralized structure as it grows?
As it introduces bridges, L2s, and DeFi applications, supply centralization pressure will increase. The true challenge will be sustaining decentralization amid utility expansion, something Ethereum has struggled with due to its rapid growth.
For now, Kaspa offers a glimpse of what a clean, organic supply distribution looks like and it’s a foundation worth paying attention to.
