Whale

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Basics

  • Term for a huge player in the market holding a substantial amount of coins/tokens. Like a fund or (very) early adopter. The idea is that whales have the power to move the market.
  • Since PoS and DeFi have gotten big, whales now have more powers besides moving the market. They now are able to change governance on-chain.
  • From this Bitcoin.com article (19-12-2019):

"A new study of 140,000 crypto addresses finds that few accounts are needed to form majority ownership of many coins. More than half of all LTC is held in just 189 non-exchange addresses, and on average, the top 100 ERC20 tokens are majority-owned by just 34 addresses. Almost 1 in 4 tokens had a majority owned by the project founder."

Wealth Attack

  • Adam Cochran had a tweet thread (27-1-2020) about whale manipulation within DeFi and the possible ways to deal with what he calls a 'Wealth Attack';

1. "Do they focus simply on scaling to dilute the potential/profitability of these attacks?

2. Do they put measures in place to cap or negatively scale large whales (such as tickets are capped or get more expensive per ticket after X tickets)?

3. Or is this simply an acceptable side effect of decentralized networks?"