How to read holder distribution

Why this matters

Concentrated supply means a handful of wallets can crater the price. Reading distribution correctly — and not being fooled by funded sister wallets — is core due diligence.

Step by step

1. Open the holders tab. On an explorer like Solscan, view the token's holder list to see how supply is split across the top wallets.
2. Exclude LP and burn wallets. The LP pool and burn address legitimately hold large amounts. Exclude them before judging concentration, or you will misread a safe token as risky.
3. Assess top-holder share. Check the percentage held by the top non-LP wallets. A single wallet with 15–20%+, or a top-10 dominating supply, is a serious dump risk.
4. Trace funding sources. Connected wallets funded by one address can hide true concentration. Follow the SOL that funded the top holders to spot disguised clusters.
5. Compare to launch behavior. Heavy early sniping or a bundle buy shows up as concentrated early holders. Cross-reference distribution with how the launch unfolded.
6. Decide based on confluence. Combine distribution with liquidity, authorities, and demand quality. Concentration is one input; weigh it alongside the rest.

Common mistakes to avoid

• Counting the LP/burn wallets as "whales".
• Ignoring sister wallets funded by one source.
• Looking only at the top holder and missing a concentrated top-10.
• Reading distribution in isolation from launch behavior.
• Treating broad distribution as a guarantee of safety.

Quick checklist

• ☐ Holder list opened on explorer
• ☐ LP/burn wallets excluded
• ☐ Top non-LP share assessed
• ☐ Funding sources traced
• ☐ Cross-referenced with launch behavior
• ☐ Weighed alongside other safety checks