Originally used as a measure of competition, we adapt the Herfindahl Index as a metric for decentralization. It measures the addresses' shares of the current supply, and is defined as the sum of weighted address balances in the network. A large score indicates high concentration of supply, whereas a small score is an indicator for more evenly distributed funds across addresses. Exchange addresses, smart contract addresses and other special asset-specific addresses (e.g. team fund addresses) are excluded.

This is the Point-in-Time (PiT) variant of Herfindahl Index. PiT metrics are strictly append-only and their history is immutable. The historic data does not necessarily reflect the best current knowledge, but the information at the time when a data point was first computed. PiT metrics are ideal candidates for applications in model backtesting and related quantitative purposes. Read our article on PiT metrics for more information.