The Average Balance (in $) indicator calculates the mean value an address holds for a particular crypto-asset. IntoTheBlock measures this by dividing the market cap over the total number of addresses holding this crypto-asset. In other words, it excludes addresses with a balance of zero to arrive at the average holdings on-chain.
💡 How can I use it?
Average Balance for Yearn.Finance (YFI)
The average balance indicator is useful to understand the amount average holders of a crypto-asset have. In Yearn.Finance's case, early users were rewarded with their average balance rising to over $100,000.
As well, it is useful to track how average balance moves versus price. For instance, in the graph above we see that YFI's average balance was higher on August 31, than on September 12, despite price being higher on September 12. This is a potential indication of large holders selling, but also of smaller players buying.
