Insider Allocation Breakdown: The Divide Between Established Giants and Newcomers

A range of factors drives the cryptocurrency market, from technological innovation and network effects to community sentiment and investor interest.

One critical factor that often gets overlooked is insider allocation—the percentage of a cryptocurrency’s supply in the hands of the founders or early backers or the development team. This allocation provides significant insight into not just the degree of decentralization and control behind a project but also the long-term incentives of and governance dynamics among the people who put the project together. That’s important context for thinking about the potential future growth of and sell-off risk associated a project.

The crypto landscape is changing. Compare it with the established giants of the past, like Bitcoin and Ethereum, and what you’ll find is an emerging class of tokens and newer cryptocurrencies that have launched since 2024. They’re a subclass of the broader crypto asset class—and should probably be thought of as tokens, rather than coins, in the traditional sense of what a currency is. Even within Web3—that’s the next iteration of the internet, based on blockchain technology—the divide in decentralization versus concentration affects much more than just user privacy.

Insider Allocation in Established Giants vs. Newcomers

As of March 2025, when we look at the top 10 cryptocurrencies by market cap, the average insider stake stands at 34.43 percent. This number encompasses not just the long-time heavyweights of the crypto space like Bitcoin (BTC), Dogecoin (DOGE), and XRP, but also much newer tokens. And yet, the distribution of ownership among these 10 tokens varies quite a bit.

Decentralized Giants: $BTC and $DOGE

Two of the most decentralized projects in the cryptocurrency space are Bitcoin and Dogecoin, both with 0% insider allocation. These tokens have existed for several years, and their community-driven development, network effects, and trust built over time lend a large measure of success to them. If any cryptocurrency could be called a fully decentralized asset, it would be Bitcoin, where no significant entity or group of significant entities has anywhere near a significant block of the not-so-secret Bitcoin stash. As for Dogecoin, it also has evolved into a widely distributed, community-oriented cryptocurrency, which is a laugh, based on its origins as the funny dog meme that it is. On the more-impressive-than-it-sounds commitment-to-decentralization scale, these two projects also score well as potential store-of-value assets because nothing is much more secure in that regard than a currency that requires widespread participation to be effective.

Highly Concentrated Control: $XRP

On the opposite end of the scale is XRP, which has an incredibly high 97.9% insider allocation. This level of concentration means that the Ripple team and early investors control nearly all of the supply of XRP. While XRP’s high insider allocation has generated plenty of controversy, it also underlines the project’s centralized governance model. For investors, this situation can embody both risks and rewards. On the one hand, it can ensure that the project’s goals align with the interests of key stakeholders. On the other hand, an unexpected governance shift or key person deciding to sell a lot of XRP can put the project at serious risk.

New Tokens: A More Centralized Start

Unlike the older cryptocurrencies, several new tokens that emerged post-2024 exhibit profoundly elevated insider ownership levels. The average insider allocation for these fresh tokens rests at a hefty 40.07%. That’s about 4.5% more than the average insider allocation of the top 10 cryptos. Certainly, there’s no guarantee that an elevated insider stake will result in a crypto project’s long-term success. But it’s also fair to say that most of the 2024 tokens under discussion have a considerably more controlled ownership structure than any of their immediate predecessors.

High Insider Stakes: $SOL and $ENA

A few of the more recent developments in the field of cryptocurrencies, where the control of insider trading is quite noticeable, are Solana (SOL) and Ena (ENA). Both these projects have received considerable backing from their teams and investors. They have advanced technologically and are potentially scalable. Yet these very qualities have attracted attention to them because they might, under certain conditions, pose a bigger risk to unsuspecting investors than projects with a more decentralized structure. So how do Solana and Ena possibly present risks of being overly centralized? Let’s first indulge in some potentially risky venture. Solana’s being backed by a number of important figures makes it “better” than being led by a number of unimportant figures. Right? And since the Venturists have invested not only in Solana but also in a number of companies that allegedly run on top of Solana, we’re in good hands. Right?

For example, take Solana, which surged in popularity on the back of its high transaction throughput and low fees. A big chunk of its tokens are held by early investors and developers. So while Solana has a rapidly grown, demonstrably useful network (this writer uses an app on it), the very nature of a high insider token allocation means decisions made by the core team could have a very pronounced impact on the Solana price. And Solana is not the only one with that kind of setup.

Lower Insider Stakes: $PENGU and $ADA

Conversely, new tokens like $PENGU and $ADA tend to operate under a more community-driven ethic, with less insider control. They stress a commitment to decentralization and governance by their respective communities, which gives something of an appearance of trust and involvement for holders. Cardano ($ADA), for instance, has a reputation for a real commitment to moving toward a decentralized model, with a larger portion of its token supply available to the public through mechanisms that offer staking and rewards.

The objective of having community-driven tokens such as $PENGU is to ensure that the control of the project remains within the community and not with a centralized team. It is an assurance that minimizes the dangers of having an insular group control a token project. But this goal comes at the price of having an easy route to effect necessary changes with the appearance of centralized control that could be seen as a danger sign.

Key Takeaways: Insider Allocation Implications

The breakdown of insider allocations, whether they belong to established giants or new tokens, affords precious glimpses into what critics of blockchain technologies proclaim: that the movement can be something of a misnomer, a tightly controlled ecosystem. These critics point out the disquieting disparity between Bitcoin’s 0% insider allocation and XRP’s 97.9% insider allocation. For anyone considering the purchase of a given cryptocurrency, the insider allocation provides an early warning as to whether what might seem a good investment is in fact a good way to support a tightly controlled ecosystem.

Insider ownership tends to be higher in new tokens, with an average of 40.07%, which shows the need for strong backing and central control in the early stage of a project’s life cycle. This high level of insider ownership may provide a token with a strong foundation on which to build its project, but it also increases the risk of market manipulation by those insiders or of those insiders simply selling off their tokens to the public.

In the end, the development and adoption of cryptocurrencies will be influenced by how well they strike a balance between decentralization and insider control. As for investors, well, understanding a project’s ownership structure is rather important to grasping its long-term growth story and potential viability as an investment.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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