Gini coefficient measurement

This page details the approach Rated uses in computing this metric for the Solana network.

Interpreting the Gini

A Gini coefficient of 0 reflects perfect equality, where all income or wealth values are the same, while a Gini coefficient of 1 (or 100%) reflects maximal inequality among values.

Gini calculation

We first take the stake weight of each of the validators on the latest day and rank in descending order accordingly. We then use the 1-2B formula for measuring Gini, where B is the area under the Lorenz curve such that:

1 - 2 * SUM((staked SOL * (rank - 1) + staked SOL / 2)) / COUNT(validators) / SUM(staked SOL)

The shape of a Lorenz Curve.

Function Components

staked SOL * (rank - 1)

is the area of the rectangular horizontal slice under the Lorenz curve

staked SOL / 2

is the area of the triangle on the left of the rectangular slice

SUM((staked SOL * (rank - 1) + staked SOL / 2))

is the sum of all the slices

COUNT(validators)

normalizes the x axis to the range 0 to 1

SUM(staked SOL)

normalizes the y axis to the range 0 to 1