Distributional equality in Ethereum? On-chain analysis of Ether supply distribution and supply dynamics

Abstract Blockchain-based emerging technologies such as decentralized finance (DeFi), cryptocurrencies, tokens, and smart contracts have introduced innovative frameworks for resource allocation and economic interactions. Ethereum, as the major technical network foundation of DeFi and tokenized assets, is becoming increasingly pivotal in facilitating an extension and alternative to traditional finance for many stakeholders, including those who are “unbanked”. Moreover, the recent transition of Ethereum from a proof-of-work (PoW) mechanism to a proof-of-stake (PoS) consensus mechanism and the Shanghai upgrade may significantly impact Ether (ETH) distribution. However, the status quo and dynamics of wealth distribution, especially after these changes in governance structure, remain unclear. By utilizing a rich dataset spanning the entire Ethereum history from July 2015 to December 2024, we analyze the balances across address groups of different sizes and the role of key economic activities and infrastructure components within Ethereum, such as exchanges, DeFi platforms, and staking. To provide detailed insights into ETH’s distributional equality, our approach combines descriptive, longitudinal, and causal inference analyses; a complete enumeration of more than 98 million unique wallet addresses; and novel on-chain analysis. Our findings show a substantial concentration of ETH within a small fraction of addresses, with approximately 0.3% of wallets holding nearly 95% of the total supply, despite the majority of wallets holding less than 0.1% ETH. However, the ETH distribution broadly resembles wealth distributions in traditional economies, with a log-normal body and Pareto-like tails. We assert that previous studies have overstated the concentration of ETH. Additionally, our dynamic analysis reveals a nuanced trend toward less concentration over time, driven by market cycles, increasing staking participation, and reinvestment in DeFi. These results challenge the notion of pervasive centralization. This study contributes to a deeper understanding of the current ETH distribution and its evolution over time. Therefore, this work provides an objective, data-driven basis for the ongoing discussion on wealth (in)equality in blockchain-based ecosystems, particularly in DeFi.