The total supply of Lorenzo's BANK tokens is 425 million, but the top 10 addresses control 395 million, accounting for 93%. This level of concentration is considered extremely high in the entire cryptocurrency market. Although more than half is in Binance's hot wallet, the remaining large holders still account for nearly 200 million tokens.
What does this chip distribution structure really mean? Is it the Lorenzo team carefully controlling the market, or is it a time bomb that could explode at any moment?
First, let's look at Binance's hot wallet, which is the largest holding address, accounting for 53.82%, or 289 million BANK tokens. These tokens are all on the exchange and theoretically can be traded at any time, but in reality, these 289 million tokens belong to countless exchange users and are not controlled by any single person.
So although concentrated in one address, the actual control is dispersed. This is completely different from a large holder owning 289 million coins. The coins in the Binance wallet are constantly flowing, with some buying and others selling. As long as there are no issues with the exchange, this part of the chips is relatively safe.
However, the remaining large holders are worth paying attention to. The second-largest address holds 52.28 million BANK, accounting for 9.72%. The third-largest address holds 45.15 million, accounting for 8.4%. The fourth-largest address holds 38.17 million, accounting for 7.17%. Together, these three addresses hold 135 million coins, accounting for over 31% of the total supply.
These three addresses are all EOA, or externally owned accounts, not exchanges or smart contracts. They are likely early investors or team members. If they collectively sell their coins, the market simply cannot absorb it, as BANK’s daily trading volume is only a few million USD. Dumping 135 million coins would cause the price to plummet to zero.
Interestingly, from the time Binance was launched in November to now, over a month has passed, and the holding ratio of these large holders has basically remained unchanged, indicating that they have not offloaded significantly. They may be waiting for a better price or still have confidence in the long-term development of the project.
Lorenzo's financing is only 200,000 USD, which is very small for a DeFi project. Most projects easily raise millions or tens of millions. Lorenzo managing to achieve a TVL of 1 billion USD with only 200,000 USD in startup funds demonstrates high efficiency, but it also indicates that they have not brought in many external investors.
The benefit of less financing is that the team has greater control over the project and does not have to cater to investors. The downside is that there is greater financial pressure, and having fewer investors means that the chips may be more concentrated, as there has been no dilution of equity through multiple rounds of financing.
From the distribution of BANK holdings, aside from the top 10 addresses, the remaining small retail investors together hold only 7% of the chips. This indicates that the circulating supply of BANK is very small, with most coins in the hands of large holders. This structure is conducive to market making and controlling the market, but is detrimental to decentralization and resistance to manipulation.
If the Lorenzo team or early investors want to pump the price, they are fully capable of doing so because they control enough chips to support the price or push it higher at critical points. Conversely, if they want to crash the price, it would also be very easy. The market's dominance is completely in their hands.
This highly controlled structure is strictly regulated in traditional stock markets because it is prone to price manipulation and harms the interests of small investors. However, in the cryptocurrency market, especially in newly launched projects, this phenomenon is very common, as token distribution usually sees the team taking a large share and investors taking a portion, while retail investors can only obtain a small share.
The specific token distribution of Lorenzo is not publicly disclosed by the official sources. However, deducing from the distribution of holders, it is likely that the team and investors account for 60% to 70%, with the remaining 30% to 40% distributed through Binance listings, CreatorPad activities, and liquidity mining.
This distribution structure is actually quite reasonable, as the team and investors have borne the early risks of the project and should take the larger share. However, the question is whether these tokens are locked, when they will be unlocked, and whether there will be a crash after unlocking. Lorenzo has not transparently disclosed this information.
If Lorenzo has a token unlock schedule, it means that the market can anticipate when there will be selling pressure and prepare accordingly. However, if there is no clear unlocking plan or if the unlocking is a one-time event, the risk is very high.
From BANK's 24-hour trading volume, which is approximately 4.3 million USD, this volume is not large compared to the TVL, indicating that most holders are not trading frequently, but rather holding long-term. This may be because they have confidence in the project, or it could be because their tokens are locked and cannot be sold.
The PancakeSwap V3 pool contains 12.86 million BANK, accounting for 2.39%. This is the only decentralized liquidity pool of significant size. If you want to trade BANK on a DEX, you basically have to go to this pool, but the depth of this pool is also not large, and large trades will have noticeable slippage.
The hot wallets of Gate.io and Bitget together account for almost 2%, indicating that aside from Binance, other exchanges have little liquidity for BANK. Users primarily trade on Binance, which also explains why Binance wallets account for 53% of the share.
From the perspective of market capitalization management, Lorenzo’s current circulating market cap is 15.5 million USD, and the fully diluted market cap is also 15.5 million USD, indicating that all tokens have been released. There is no future unlocking pressure, which is good news. Many projects have a circulating market cap that is only 10% to 20% of their FDV, with the remaining 80% to 90% still locked, which will lead to significant selling pressure upon unlocking in the future.
However, the problem with BANK is that the chips are too concentrated. Even without future unlocks, the existing large holders can dump at any time, making the market fragile. Unless these large holders publicly commit to locking their tokens for a period of time, small investors will always bear the risk of large holders dumping.
What Lorenzo can do is establish a more transparent token governance mechanism, such as requiring large holders to stake BANK into veBANK with a lock-up period set for 1 to 4 years. The longer the lock-up, the higher the voting rights. This not only incentivizes long-term holding but also locks up the circulating supply, reducing selling pressure.
Another method is to set restrictions on large holders selling, such as allowing a single address to sell no more than 0.5% of the total supply per day. This way, even if large holders want to offload, they would have to sell in batches slowly instead of crashing the market all at once. Of course, such restrictions are not easy to implement technically and may cause controversy.
