Definition ∞ Wealth concentration describes a condition where a disproportionately large portion of total assets or capital is held by a small segment of the population or a limited number of entities. In the context of digital assets, this can manifest as a few wallets or addresses controlling a significant supply of a particular cryptocurrency. This phenomenon can influence market dynamics, governance decisions in decentralized protocols, and overall market stability. It raises questions about equitable distribution and potential manipulation.
Context ∞ The issue of wealth concentration within digital asset ecosystems is a recurring discussion, particularly concerning its implications for decentralization and market fairness. A key debate involves whether initial token distributions or early adoption patterns inherently lead to such concentration. Critical future developments include the implementation of more equitable distribution mechanisms and governance models designed to mitigate the influence of large holders over time.
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