Prerequisites
You can look up the target token's total holder count via blockchain explorers or on-chain data platforms such as Etherscan and Dune.
You can distinguish the difference between "token holding addresses" and "real independent users" — one single user can control multiple addresses.
A fast growing number of new token holders does not equal a large number of real buyers. Developers and bots can generate tens of thousands of wallet addresses in minutes to make the holder count look like it's skyrocketing.
Chainlink (LINK) just saw its Ethereum holder count exceed 900,000, with a monthly increase of over 20,000, while its price did not rise significantly in the same period. This phenomenon is very common in the crypto market — holder count growth can be driven by many factors other than "real buyers". The 3 steps below will help you break down how many of these holders are actual real people.
Step 1: Check "Funding Source" — Where Do New Addresses Get Their Tokens From?
[What to do]: Trace the first funding source of newly added token holding addresses to determine if the funds come from "exchange withdrawals" or "internal on-chain transfers".
[How to do it]: Check the "first incoming transaction" record of the new token holding addresses via blockchain explorers or tools like GMGN.
Scenario A: If the first funding of a large number of new addresses comes from the same distribution address or the same exchange hot wallet → Highly suspected of being batch-generated. Research shows that among early profitable addresses of top Meme tokens, the proportion of funds from Coinbase and Bybit is significantly higher than that of zero-value tokens, whose profitable addresses have more funds from Binance and OKX. The same funding source may mean the same entity controls multiple addresses. In this case, the growth of token holder count does not represent an increase in real buyers.
Scenario B: If the funding sources of new addresses are scattered, coming from different exchanges or different on-chain wallets → It is much closer to the distribution of real users.
[Completion Criteria]: You have confirmed whether the funding sources of new addresses show the "single source" feature.
Step 2: Check "New Wallet Ratio" — How Many Addresses Are Newly Created?
[What to do]: Calculate among the new token holding addresses, how many have a wallet creation time very close to their first purchase time.
[How to do it]: Check the "new wallet ratio" of the target token on platforms like GMGN or Dune. The calculation rule is: a wallet is counted as a new wallet if the time difference between the token's launch time and the wallet's creation time is less than 24 hours.
Scenario A: If the new wallet ratio is significantly high (e.g. exceeding 20%-30%) → Highly suspected of bot farming. Among the top 100 profitable addresses of top Meme tokens, the new wallet ratio is extremely low. If the target token's new wallet ratio is far higher than this level, it means a large number of addresses were temporarily created right after the token launched, which is more likely to be batch generated to inflate the holder count.
Scenario B: If the new wallet ratio is relatively low and close to the distribution of top tokens → The possibility of real user participation is much higher.
[Completion Criteria]: You have estimated the proportion of new wallets in newly added token holding addresses, and judged whether the proportion is abnormal.
Critical Risk Warning: Token holder count can be easily batch manufactured. Developers can use automation scripts to control tens of thousands of wallets to perform buy and sell operations, simulating huge trading volume and surging holder count. If you only judge that a project is gaining popularity by its "growing holder count", you may enter the market at the peak of a "false boom".
Step 3: Cross-verify if "Social Media Activity" Matches "On-Chain Behavior"
[What to do]: Compare the discussion popularity on social media with the actual number of new buyers on chain.
[How to do it]: Check the activity level of the token's social media communities (such as Telegram, X/Twitter, Discord), and compare it with the trend of "newly added token holding addresses" on chain.
Scenario A: Social media is extremely lively (lots of discussions, non-stop messages), but the on-chain new token holding address growth is slow → Possible "artificially inflated popularity". Large trading volume usually corresponds to a highly active community. If there are very few messages in the group but the trading volume and holder count are rising, it is very likely that these data are artificially boosted by bots.
Scenario B: Social media activity grows synchronously with on-chain new addresses → It is more likely driven by real organic demand. For tokens with real community support, social signals appear along with on-chain evidence: more new wallets, higher holder count, more independent buyers.
[Completion Criteria]: You can judge whether there is a reasonable synchronization relationship between social media popularity and the growth of new on-chain addresses.
Common Mistakes to Avoid
Seeing the "token holding address exceeded X ten thousand" announcement and immediately thinking that "a lot of people are buying". People tend to ignore that token holding addresses may be multiple addresses controlled by the same person, airdrop distribution results, or bot-generated farming addresses. Glassnode research shows that the real driving force for market price growth comes from "first-time buyers" — these are new users purchasing the asset for the first time, not repeated counting of existing addresses. If newly added token holding addresses are concentrated in a few funding sources or are mostly new wallets, they are not real buyers.
Verification Method for Completed Operation
Use Dune or Nansen to plot the overlay curve of the token's "total holder count" and "daily new independent buyers (addresses that make their first purchase of the token each day)". If the two trends are highly consistent, it means the growth of holder count is accompanied by real new user onboarding. If the holder count keeps rising while the first-time buyer number stays stagnant, the growth is mainly from dispersion of existing addresses.
Next Step Action
If you judge that "bot farming" accounts for a high proportion of new token holding addresses, shift your focus to the two metrics of "independent buyer count" and "daily new real users". The absolute number of holders is not important, what matters is the "number of newly entered users" and the "decentralization degree of participation quality". Verification channels: Glassnode Studio's "First Buyers" metric or the custom "first-time purchase address" query dashboard on Dune.
