Introduction

This report will be going over the various DeFi workflows and strategies that can be performed using Nansen’s dashboards, tools, and available data. It encompasses everything from discovery to diligence and defense.

Nansen DeFi Strategies

Token Due diligence process

• Open Token God Mode for your desired token
  • Look at the token seniority distribution. Are there only hodlers or new buyers too?
    • If there are only hodlers, they most likely have a much cheaper cost basis and could potentially dump on you. Find out the cost basis of the top wallets. How much are they up by?
  • Look at the # of unique addresses. Is it growing or declining?

• Look at the transactions tab
  • Has volume been picking up? How has the price action been?

• Are there any new large token balance changes?
  • Scroll through 7 day top transactions
  • Any large buys or recent first ins?

• Use Nansen Portfolio and look at their positions to gauge conviction level. Does this token represent a majority or a nominal portion of their portfolio?
• Set smart alerts as necessary
• Who are the top holders? When did they buy and have they sold any? What price did they get in at?
  • How concentrated are the top holders? If it's too highly concentrated within a few top wallets, there’s a risk of getting dumped on

• Are there any Smart Money buyers? Search for “🤓” in the filters. A primer on all of Nansen’s Smart Money labels can be found here.
  • Is Smart Money balance increasing over time?
• Are there any notable funds buying?

• Open waller profiler for token on specific wallets to dig deeper
  • Are they TWAPING? Bought long ago? Bought recently?
  • What's their entry price?
  • What are they doing with the tokens? Staking? LPing?

• Open Nansen Portfolio on the wallet; is this a large position relative to their other positions? Is it a high conviction play for them?
• Set smart alerts to know when they’re buying or selling

What are people doing with XYZ token?

• Open Token god mode for your desired token
  • Look at top balances
    • Where are most of the tokens concentrated, are they being staked or being deployed elsewhere in specific pools?

• Open wallet profiler for token on a specific wallet address to check what they’re doing with the tokens

• Set smart alerts as necessary to be notified of future selling, liquidity removal or un-staking

Where are the hottest staking and LPing contracts?

• Use the Defi Paradise dashboard to look at the Liquidity Pool and Staking tables

• Play around with the different filters like APY, # of Smart Money holders, TVL, etc

  • If a lot of Smart Money wallets are staking or LPing, it may be beneficial to dig deeper into the protocols
  

What has Smart Money been up to?

• Check Smart Money dashboard
  • Can filter by certain desired Smart Money labels (top left) to reduce noise. Make sure to filter for the Smart Money labels that align with your desired strategy (e.g. for yield opportunities - look at Smart/Smarter LP)
  • DEX TRADES TAB
  • Look at the top transactions in the last 24 hours. Sort by taker token amount and maker token amount to check what's being bought and sold the most. Note that the taker token is the token that is being used to swap for the maker token
    • Be careful when sorting by taker/maker amount as it might miss the TWAP transactions
    • Are there any interesting tokens you haven't seen before?

• Look at Token Transfers
  • Are there any large amounts of tokens being sent to exchanges?
  • Are there any Smart Money wallets that keep popping up? (dig deeper on Wallet Profiler and Nansen Portfolio)

• Look at the top volume dex trades traded by Smart Money
  • Are there any new tokens you don’t recognize but is trading at very high volumes?
    • Look into the specific token more using token god mode
    • Beware of washtrading

• TRANSACTIONS TAB
  • Any large amounts of ETH being sent to exchanges? Sending tokens to a CEX is generally a bearish sign as it implies selling
    • Sort by Value

• Token Holdings Tab
  • Look at the token balance (changes in last 1, 7, 30 days) and stablecoin holding % vs all coins (scroll to the bottom)
    • Can filter by a specific token to check what Smart Money is doing on a particular token

• Increase in balance is not always indicative of buying. It could be an unlock, transfer, liquidity removal, or inflows from a bridge contract
  • To dive deeper into the source of funds, right click on the token symbol and run Smart Money token profiler for token

• Once you identify wallets, right click on the wallet to use wallet profiler for token to look at specific transactions. Is this a large buy compared to past wallet behavior?

• Look at their wallet labels too
• Run Nansen portfolio to get a holistic view of their holdings
• Set smart alerts if you decide to copy trade and want to know when they dump. Besides Smart Money, use token god mode and set alerts for whale wallets in the top balances. Additionally, putting vesting contracts into alerts is a good idea as you can track what investors do with their funds in real time.

Finding the wallets behind Smart Money token inflows on the homepage

• Find which entities or wallets are behind the flow by right clicking the token and running token movements

• Once you identify the wallets behind the inflow, run wallet profiler for token. Double check etherscan to make sure the transactions are buys and not just transfers, vestings, or removing LP
  • Is this a large buy compared to past behavior?
  • Compare how large the buy is relative to their portfolio with Nansen Portfolio to determine conviction level. What % of the portfolio does this represent?

• Check who the top balances of the token are using token god mode.
  • Is the Smart Money token balance increasing over time?

• Look at token seniority distribution
  • What's their cost basis?
  • How long have they been holding the tokens for?
• What is the # of unique addresses?
• Are there any abnormal volume spikes?

• Look at balance changes in the last 7 days
  • Any large buys or recent first ins?

• Run Nansen Portfolio and look at their portfolio to gauge conviction. Anything sized less than 10% of their portfolio can generally be classified as low conviction. Anything greater than 10% can indicate high conviction. But depending on the maturity of the token, the threshold levels can be adjusted situationally.

Finding alternative wallet addresses for a particular wallet

• Run wallet profiler on an address
  • Look at the Top interacting wallets under the counterparties tab and filter for “deposit” to find the CEX deposit addresses

• Run wallet profiler on the CEX deposit address and look at the top interacting wallets to check if any other addresses routinely send funds in.
  • This does not 100% confirm that it’s a secondary wallet but further due diligence like wallet pair profiler and finding where the initial funded ETH was received from can provide additional insights.

Finding high alpha wallets (insiders/private info)

• Find a token that has appreciated a significant amount recently due to a catalyst event
  • Use token movements and find wallets that have had a high balance change prior to the catalyst to identify any wallets that have been accumulating abnormally

• Open wallet profiler for token on recent wallets with large positions. Any abnormal buys and immediate profit taking after the event? If so, consider setting a smart alert for the wallet as they may have an informational edge in the markets.

• Use Nansen Portfolio to look at their other positions and past transactions. Do they consistently outperform?
  • Consider setting up smart alerts for their wallet
  • Make sure they’re actual buys and not just transfers or vests

What overlap in holders is there between 2 tokens if any?

• Say you own or are bullish on 2 tokens; run token overlap to find competitor’s wallets who think like you. Use wallet profiler or Nansen Portfolio to check what else they own
  • If you consider yourself smart then wallets that hold tokens you’re bullish on are probably worth looking into

• Use token overlap dashboard
  • Are there any big whales that own both token X and token Y?
  • Use this to verify potential pair trades

• Use token overlap to find narrative wallets
  • E.g if you want to find a gaming focused wallet, search 2 tokens like AXS and ILV
    • Use Nansen Portfolio to check what else they own and set smart alerts to know what new projects they buy into

Monitoring ETH and stablecoin flows

• Use ETH tracker and stablecoin master to monitor flows
• Stablecoins flowing into a CEX generally indicates buying (bullish)

• ETH flowing into a CEX generally indicates selling (bearish)

Which wallets are bridging and how much traction and activity is there?

• Use the bridge builder to identify hot bridge contracts
  • Where are people bridging to?

• Run Wallet Profiler for Token (ETH, USDC, DAI, etc) on the official bridge contract for the highest token balances on the bridge
  • Look at top depositors to check who’s bridging funds over for that specific token. Toggle with the selected token to get a bigger picture of all the depositors.
  • Are there any Smart Money wallets bridging? What are they doing with their funds after bridging?
  • Are there any whales bridging? What are they doing with funds?

• Why are they bridging?
  • Potential Airdrop? Look for Airdrop Pro labels
  • New farms or new ecosystem incentives? Look for First Mover LP, First Mover Staking, and Smarter LP labels
    • Look for confirmation from announcements on social media
• Look at the different ecosystem dashboards under Macro if available
  • Compare its traction to Ethereum

• Look at transactions by entity. What are the most popular protocols?
• Are daily transactions growing?

Finding Token Vesting Schedules (defense)

• For tokens that have not started vesting yet, run token god mode for a token and look at top balances for any wallets that contain “vesting” in the name to identify vesting contracts. One can filter down the wallets for these wallets, if any, given some vesting contracts may not be labeled or may be from another wallet such as the treasury
  • Set a smart alert on vesting contracts to be notified in real time when tokens get disbursed
  • If a token has already started vesting, set up smart alerts for recipients to get insights on what the recipients do with their tokens after receiving them

Airdrop Hunting and Verification

• Identify potential airdrop opportunities such as Arbitrum
• Run wallet profiler on Arbitrum bridge and look at Top Labels From Interacting Wallets dashboard and filter for “airdrop”

• Check and see if there are lots of Airdrop Pro addresses interacting with the contract. If there is, it might be worth interacting to potentially receive an airdrop

What are recipients doing with their claimed tokens, airdrops, or unlocks?

• Run token god mode on the token and look at the top balances table to identify distribution/claim contract address

• Right click on address and run top recipients and then wallet profiler for token on specific wallets to check what each address is doing with their tokens
  • This can provide additional insights whether to hold, buy or sell depending on the actions of the recipients.

Where are people parking stablecoins in the ecosystem?

• Go to stablecoin master to check which exchanges hold the most stables and whether there's been an inflow or outflow

• Go to the notable wallets tab to find top stablecoin balances and changes
  • Filter using “🤖” to surface the contracts with the highest amount of stables. The battle-tested protocols are usually the safest and will generally have the highest TVL.

Smart DEX trader copytradoooor

• Look at smart money dex trades tab: top transactions
  • Filter by smart dex trader and look at what they’re buying (make sure they’re actual buys and not just being sent tokens)

• Dig deeper into specific wallets by using wallet profiler for token. You can also use Nansen Portfolio to check other positions they own and their track record for previous trades

The RFVOOOR (risk free value)

• Run token god mode on USDC or any other stablecoins
• Go to the “token distribution” tab and filter top balances by “treasury”

• Identify projects that might be trading less than its treasury.
  • Find out its market-cap, circulating supply, FDV
• Lurk in governance forums and discord/twitter
  • Any chance of treasury distribution?
  • Is the project better off shutting down and redistributing funds to its holders? Consider partaking in a governance proposal. If the project does decide to shut down, the token price should reflect its treasury value.

Why is gas so high right now?

• Use gas tracker dashboard and look at the top gas consumer accounts to find the contracts consuming the most amount of gas currently