$BMT
On-Chain Due Diligence: How to Use Bubblemaps to Assess Token Distribution
Conducting thorough due diligence is essential before engaging with any new token. Bubblemaps provides a valuable tool for this process by transforming complex on-chain data into intuitive visual bubble charts that reveal token distribution patterns.
To use it effectively, enter a token contract address on the Bubblemaps platform. The resulting visualization shows wallet clusters sized by their holdings. Look for excessive concentration in a few wallets, which may indicate potential manipulation risk. Also examine connections between wallets - multiple wallets with similar transaction patterns might belong to the same entity attempting to appear as separate holders.
This visual approach allows you to quickly identify red flags that might not be apparent from reading contract code or whitepapers alone. While not foolproof, incorporating this tool into your research process can help you make more informed decisions and avoid potentially problematic projects.
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A practical guide on using Bubblemaps' visual charts to assess token distribution patterns and identify potential red flags during investment research.