Nansen, a blockchain analytics platform, has quickly become one of the more prominent and popular data resources in the industry.
The platform is designed to combine on-chain data with an ever-growing database that includes millions of wallet labels. The team introduces signals into blockchain data, takes in, enriches and collects that information.
Nansen also performs data engineering, where they present available information in a comprehensive dashboard where cryptocurrency investors can more easily draw actionable insights and conclusions.
This July, during ETHCC 5 in Paris, CryptoPotato had a chance to sit Daniel Khoo And elizabeth yung from Nansen. Elizabeth is Senior Research Analyst at Attribution, and a Research Analyst on Daniel Nansen’s Alpha team.
We discussed various trending topics such as the current market situation, non-fungible tokens, where the next hype will come from, as well as some exciting yet not-known terra fiasco.
Smart money to follow to identify trends
Nansen tracks ten different series—most EVM-compatible ones, but there’s also a dedicated dashboard for Solana, Terra, and even Ronin—Axi Infinity’s network.
They provide a number of insights on non-fungible tokens (NFTs) where users can track blue-chip NFTs such as CryptoPunk, Bored Apps and other lesser-known collections.
Based on incoming information, the prices of NFT projects related to art also appear to be moving in cycles, though sometimes differently relative to Bitcoin or Ethereum.
“I think, historically, even NFTs have sometimes only performed slightly differently than Ethereum or Bitcoin – eg, the general market. Sometimes, even if the market isn’t doing so well, they could possibly outperform. In general, looking at our NFT index gives an idea of how the market for NFTs is trending.”
With regard to the possibility of predicting upcoming and future trends according to Khoo, Using on-chain data can help track smart money moving in and out of the market.
“Smart money is either investors who have historically been very profitable or funds and financial institutions that are active on-chain.
More or less, we generally follow this smart money as they are mostly seed investors or private investors, and they usually identify trends very early. That’s how we use this data to see what the big funds are seeing and what trends they’re identifying. ,
‘Many big institutions are starting to buy back’
Over the past few months, we have seen several large companies, such as Celsius Network (one of the largest institutional and retail lenders in the industry), as well as Three Arrows Capital (3AC – a leading cryptocurrency hedge fund), default due to excessive leverage. and improper risk management.
The collapse of the entire Terra ecosystem caught many people, including the aforementioned, off guard and caused catastrophic losses across the board – a phenomenon many refer to as “deliverging.”
According to Nansen, however, there are other factors that contribute to the ongoing bear market.
“Not only were the big players delivering, but there was also the macro position and a general loss of confidence in certain assets. All of these contagion effects come from, for example – the Luna and Terra collapses – and affect all markets as well.
With so much fear in the market, even the funds are taking profits and selling, we can definitely see that the prices are falling significantly. ,
However, on the more positive side, Khoo revealed that “many large institutions are actually starting to buy back, and that could be a good sign.”
Furthermore, comparing the current market conditions with those of 2018, institutions appear to be the key differences.
“Even now, when prices have dropped significantly, we see very strong support from many large institutions that are buying back in bulk and holding for the long term.
Back in 2018, there could have been less institutional funding, with less money in stablecoins that were ready to be deployed. I think the main difference is that people have more purchasing power now and many institutions are able to hold on for a longer period of time. ,
Terra Fall: Multiple entities caused the attack
The collapse of the Terra ecosystem left the entire cryptocurrency community, and perhaps the tech world, in general, in awe. The multi-billion dollar project lost all of its value in less than a week, a feat never seen before.
The effects are still felt to this day as many projects are plagued by contagion. One narrative that slipped away was that the UST algorithm was the same entity responsible for the attack on the stablecoin, pushing it down with its pegs. However, according to on-chain data, Nansen’s claim is not entirely true.
“After digging into the on-chain data, we found that it was not just one entity, but it was actually some wallets that started Dipag. We don’t know for sure whether they were interconnected or their What were the intentions?
It is also important to note that their intention may not be to intentionally undercut the stablecoin “but to create some imbalance in the pool and some imbalance when they actually remove some liquidity.”
“The other shocking thing is that for the discount for stETH currently trading and also at the time when Celsius had to open its leverage position.
We can see that it all started with the collapse of UST and Terra, which actually led to discount bets, as Terra, Luna and UST were huge investments for these entities.
On the bright side, though, we may be done with the contagious effects of the collapse, although the market may not be out of the woods just yet. This is to stop withdrawals and transactions with certain cryptocurrency exchanges.
Nansen doesn’t track off-chain data and describes the situation as “a bit scary” because they “can’t see what’s going on with their (read: centralized entities) books. Certainly “There are some things happening behind the scenes that we are unable to track, and this situation may not be completely over, but we will never know.”
Nansen’s future
Speaking about the future of Nansen, Yeung spoke a lot about Nansen Connect – a messenger application that enables users who hold a specific NFT to connect with other holders, as well as with wallet labels. Join chat rooms on premise.
“This is a very exciting feature that we recently released. If you have a specific label to your name – maybe you are a smart investor, smart money – you can connect and connect with others of similar profile. Be able to chat.”
Nansen aims to become the information super-app of Web3 by integrating Layer 1 and Layer 2 blockchains, expanding its coverage and wallet labels.
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