A living document that dives in-depth into each of the Smart Money segments we have, and an occasional alpha leak or two.
Introducing Smart Money
In the unregulated world of crypto, there are 101 ways for someone to develop an edge. This could be by working in the space and knowing the right people, being in the right telegram alpha group, or just exploring the chain and looking to front-run exchange listings.
However, one thing is clear - The chain never lies. In our quest to surface the signal at Nansen, we are consistently working on analyzing Smart Money - Addresses that have demonstrated on-chain evidence of being smart. As such, this will act as a living document to cover our various Smart Money segments.
In the next few segments, we will cover some of the existing Smart Money labels we have, defining them as well as suggestions on how to utilize them.
First Mover LP & Staking
First Mover LP - Top 200 addresses based on the number of liquidity pools of a certain size that they were first movers in (First 100 addresses to enter)
First Mover Staking - Top 200 addresses based on the number of staking pools of a certain size that they were first movers in (First 100 addresses to enter)
Now, this generally captures addresses that fall into two buckets:
- Apes that do not sleep, always lurking on Twitter and Discord, ready to ape into the next staking pool.
- Project supporters (eg. investors, whale friends) that want to improve seed liquidity and help a project gain traction.
“There are 3 ways to make a living: be first, be smarter, or cheat” - here, we try to be first.
One way to start your deep dive would be to check out our Smart Money dashboard and filter for First Mover LP and Staking to get a list of addresses that have been active the last 24 hours. Next, study the addresses using Wallet Profiler and generate smart alerts for those that are active in your timezone.
Source: Nansen’s Smart Money Dashboard (Filtered for First Mover Staking & LP)
Source: Nansen’s Wallet Profiler for a First Mover LPFunds & Private Sale Investors
Funds - Public entity that invests and manages money in crypto.
Private Sale Investor - Addresses that have received at least $100,000 from investor distributor addresses across a significant number of different tokens.
The distinction between the two is a matter of identification. In the case of a fund, this means that we have identified the entity behind the wallet. On the flipside, a Private Sale Investor (PSI) refers to an address that demonstrates on-chain evidence of investor behavior. The scope is a tad wider here, including advisors, angels and potentially entities that are not funds but work on an allocation basis. (eg. media firms, advisory firms etc)
Beyond simply copy-trading such addresses, it would be useful to understand things such as their current portfolio, their allocation breakdown as well as protocols they are using.
A more sophisticated method of digging would be to track incoming and outgoing flows. A short case study:
- A strategic funding deal between Muse DAO and Defiance Capital could have been spotted on-chain before the announcement if one was observing tokens inflows to Defiance Capital addresses.
Source: Nansen’s State of The Crypto Industry Report 2021Smart & Smarter LP
Smart LP - Made more than $100,000 by being a liquidity provider and liquidity miner on Uniswap or Sushiswap. Profit calculations do not include impermanent loss.
Smarter LP - Top 1% of liquidity providers and liquidity miners in terms of profit and ROI on any Uniswap V2 type of DEX. Profit calculations include impermanent loss.
Thankfully, not dumb and dumber. Similar to First Mover LP, these labels are looking at liquidity provision. However, the key difference is that here, we use realized profit as a metric as opposed to speed.
As you probably know, impermanent loss is often touted as the “silent killer” in DeFi. One needs to be ahead of the curve to out-perform impermanent loss, hence the label. On top of looking at performing similar LP provisions, such addresses are likely sophisticated crypto-natives and it’s worth exploring what else they are up to to get an edge.
Airdrop Pro
Addresses that have received a significant amount of tokens across multiple airdrops (Airdrops are valued based on the 30d average after the distribution starts).
Here, we look at addresses that have received a significant number of airdrops. Addresses that have this label typically fall under two categories - Spray and pray or interact with a curated list of protocols. The addresses that fall into the second category are the ones you should keep an eye on.
You will have to dig deep and look at the transaction history of the addresses before shortlisting a handful to keep an eye on. Here are some examples of notable projects that have had a sizable number of interactions:
We have no knowledge on the airdrop potential of these examples and have no comments on the quality of the protocols themselves. View the list above as simply examples for you to begin your exploration journey.
Smart NFT Trader
The top 100 addresses in terms of realized profits from NFT sales and top 100 addresses based on our internal trader score metric
As the term implies - addresses that are good at trading NFTs. Be it flipping an NFT from 0.1 ETH to 1 ETH or from 30 ETH to 60 ETH, we have ranked every single NFT trader by their realized profit, in both absolute and relative terms. Furthermore, we only consider traders that have flipped more than a certain amount of collections, just so we avoid any one-hit traders (eg. traders that made it via only 1 collection)
Naturally, this would be the type of address one would copy-trade. You can take a look at our NFT Paradise profit leaderboards dashboard to find examples of such addresses to keep an eye on.
Source: Nansen’s NFT Paradise Profit Leaderboard DashboardSmart NFT Hodler
The top 100 addresses in terms of estimated profits of their current NFT portfolio and top 100 addresses based on our internal hodler score metric
Here, we look at unrealised profits instead. How many addresses are sitting on a ton of paper profits but are still diamond handing their NFTs? This segment focuses on addresses that have not sold.
A good way to get started is to check out our Smart Money Tab on NFT Paradise, look at recent transactions from Smart Money addresses and see what they’re doing. You can even filter specifically for the Smart NFT Hodler label and for the type of activity you’re looking at (Buy, Sell, Mint) to get a better view. If you see a handful of Smart NFT Hodlers selling a particular collection, it’s a potential “exit” signal and vice versa.
Source: Nansen's NFT Paradise Smart Money DashboardSmart NFT Early Adopter
The top 100 addresses that have invested in selected blue-chip projects before a specified date and are still holding an NFT from the project
Quite a number of blue-chip projects generally have an “alpha” channel or a token-gated discord. Observing the wallets might be useful in telling us what the group is up to. This thread by Nelson nicely covers one way of finding out such “alpha groups”.
“What if their ape is being kept in a vault? Won’t the labels not work anymore?” - This could be true, but there’s where one might need to put some hard work in. Often, there would be “links” between a trader’s hot and cold wallets. One could observe the counterparties' table on Wallet Profiler to find some clues.
Example of a Vault Wallet’s Counterparties table
Smart NFT Minter
The top 100 addresses that have at least ≥ 5x realized profits on multiple collections that were minted in the last 60 days
Minting is hard, especially with the recent explosion of NFT projects. How does one determine what to mint? Tracking these addresses might be a way of surfacing interesting mints.
Quick Smart Alert Tip:
Instead of only keying in the address, add a “from:” in front of the address, making it “from:0x....” to filter for transactions initiated by the address. This significantly decreases the amount of scam tokens appearing (eg. if an address receives tokens randomly), reducing the noise.
Conclusion
Knowing what transactions are happening on-chain are only actionable if you know who’s behind the transactions. By utilizing our labels, you are able to make more informed investing decisions and be aware of opportunities as soon as they surface on-chain. We’ll be adding more commentary on more labels in time to come, keep an eye on this page and continue exploring!
Disclaimer
The authors of this content and members of Nansen may be participating or invested in some of the protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Nansen does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Nansen at any time without notice. Nansen accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.
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Bernice
