Blockchain is an open, decentralized distributed ledger with features such as transparency, immutability, and security. Various on-chain data, including transaction information, wallet activities, and contract deployments, are publicly accessible and transparent, enabling users to query them anytime.
With the rise of DeFi applications and NFT projects, more users engage with different DAPP services, resulting in a growing complexity of on-chain data. Leveraging this data, users can assess market sentiment, identify potential projects, track “Smart Money,” and conduct project research. Proficiency in understanding on-chain data can greatly empower industry participants.
The maturation of the Web3 industry has also given rise to various data analysis platforms. Through these platforms, users can reduce the time needed for raw data processing and analyze on-chain activities, projects, and transactions more conveniently and comprehensively. Today, we will introduce six commonly used analytical tools in the market and explain their usage through case studies.
Blockchain explorers provide professional blockchain information, commonly used for querying transaction details and wallet statuses. Existing blockchain explorers have evolved from platforms solely for searching block information and on-chain transactions into data analysis platforms. Users can directly utilize charts and organized data created by these explorers for investigating on-chain activities or tracking specific on-chain transactions.
Taking the Ethereum blockchain explorer Etherscan as an example:
UI and Feature Layout of Etherscan (Source: Created by Author)
Using the token GT as an example, input the GT token contract address (0xe66747a101bff2dba3697199dcce5b743b454759) in the Etherscan search bar to retrieve on-chain data related to GT on the Ethereum blockchain.
First, in section 1, basic information is provided, including holder count, price, total supply, circulating supply, etc. Secondly, section 2 contains organized data. In “Holders,” users can view major holders’ quantities and wallet addresses, enabling tracking of significant investor behavior for investment purposes. Through “Contacts,” users can inspect on-chain contracts associated with the project, gaining insights into the token’s deployment via underlying contracts. “Analytics” further supports historical price and transaction data exploration.
GT-related Data on Etherscan (Source: Created by Author)
Explorers generally offer various macro-level data about the blockchain network, such as daily new wallet addresses and network staking status. In Etherscan’s “Blockchain Data” section, users can review trend charts depicting network transaction volume, average Gas Fee, network address count, etc. The “Network Data” section provides data and charts related to node tracking, network difficulty, etc.
Etherscan Data on Ethereum Network/Blockchain Operation (Source: Created by Author)
For obtaining fundamental information about a transaction/address/contract, blockchain explorers can be used. While they cover basic aspects, if you’re interested in understanding network operation, a blockchain explorer is an indispensable analytical platform. It provides a range of network data, from the increment of wallet addresses to the quantity of network staking. Note: Different blockchain networks have distinct explorers, and even within the same network, various explorers might offer slightly different functionalities.
Dune transforms inaccessible data into human-readable tables and visualizes it through various graphical representations, including bar graphs, area charts, line graphs, and pie charts. Within Dune, users can program data dashboards or view panels designed by others.
It’s worth noting that Dune employs a straightforward SQL language, making it accessible for non-programmers to construct their panels using documentation or to analyze existing panels by either borrowing or modifying them. Browsing through Dune’s panels is free, with payment required only when creating panels that exceed a certain number of “queries.”
Dune Homepage (Source: Dune)
Since Dune compiles raw on-chain data into its database, users must organize and edit it effectively to obtain their desired information. The aggregation of various visualized data is referred to as panels. Upon entering Dune’s homepage, you can find the following:
Starting with panels sorted under “Trending,” you might come across the recently popular “Layer2 War” panel. Clicking into it reveals that assets bridged from Ethereum to the Arbitrum network are currently dominant.
Layer2 War Data Page (Source: Dune)
A substantial amount of bridged funds suggests active participation of funds in Web3 applications on Arbitrum, enhancing the potential for both promising and high-quality projects. This information prompts you to return to the homepage to explore the details of the Arbitrum ecosystem further. Upon locating the corresponding data panel, you discover that despite a recent decrease in transaction activity, user numbers surged in Q1 of this year, and contract creation has been consistently on the rise, indicating the emergence of potential projects.
Arbitrum Data Charts (Source: Dune)
After using other tools, such as Defillama, to understand the Total Value Locked (TVL) ranking on Arbitrum, you stumble upon the intriguing project GMX. A simple search for GMX within Dune yields relevant data panels, enabling you to conduct in-depth research on the project.
GMX Data Charts (Source: Dune)
Within Dune, users have the freedom to create their own data panels or explore panels crafted by others. These panels encompass various levels, including projects, public blockchains, and specific industries. Even for the same project, different creators offer distinct angles of data analysis, which can be valuable for industry analysis and project-specific research. With a foundation in SQL and documentation aid, users can craft the desired data panels.
DefilLama is a comprehensive DeFi analysis tool that now integrates not only conventional DeFi data but also NFT data, transaction aggregators, stablecoin tracking, and more. As shown in the diagram below:
DefilLama Main Page (Source: DefilLama)
Following the liquidity staking attention after the Ethereum Shanghai upgrade, clicking on the Ethereum liquidity staking panel reveals the changing trend of the staked amount and market share distribution. By clicking on the 7d Change sorting option, it becomes apparent that the TVL of a project called Stader has surged by 40% in the last seven days. This increase could be attributed to product upgrades, whale participation, market FOMO, etc. Subsequently, an investigation into the relevant protocol panel is carried out.
Ethereum Liquidity Staking Data (Source: DefiLlama)
Upon entering the protocol panel, more project-related information becomes visible, including TVL, token information, funding details, and competitive offerings. After grasping the fundamental data, one can refer to competitive data and combine it with information from the project’s official media and product usage to decide whether to participate or invest.
Note: The provided example serves illustrative purposes and should not be construed as investment advice.
Stader’s Data and Introduction (Source: DefiLlama)
DefiLlama serves as an easily accessible tool to monitor fluctuations in DeFi protocols. It offers comprehensive information about individual protocols and is evolving from a data aggregation platform into a comprehensive hub. On DefiLlama, users can input tokens, and the system suggests various strategies. Additionally, users can directly engage in swaps and lending on the platform. Crucially, it’s free of charge.
The Block is both a media company reporting on cryptocurrency news and a data analysis platform, offering a variety of on-chain and off-chain data. Overall, its off-chain data is more comprehensive, while its on-chain data is more distinctive. If you’re interested in global cryptocurrency options and futures, CME traders’ positions (Commitments of Traders, abbreviated as COT) data, and crypto companies, you can find them all on The Block. Today, our focus is on introducing the unique on-chain data segment.
The Block’s Data Interface (Source: The Block)
Using the DeFi section data as an example (as shown above), The Block divides DeFi into 8 categories, including assets, derivatives, and exchanges. If we focus on the common exchanges category, we find that the trading volume on decentralized exchanges (DEX) is less than 20% of centralized exchanges (CEX). However, DEX is on a rising trend. In the DEX category, a major portion of the trading volume is captured by Uniswap, Curve, Pancake, etc. Among them, Uniswap consistently holds around 50%-60% of the trading volume, showcasing the established dominance of CEX.
In the image at the lower right, we can also observe that within aggregator exchanges, 1Inch’s market share dropped from 69% to 43% over a year. Is this due to innovations in other products or inherent issues with 1Inch itself? This is one of the contemplative questions brought forth by the data.
DeFi Exchange-related Charts (Source: The Block)
The Block’s data focuses on the macro perspective and boasts numerous unique data panels. Given that many panels consist of data from various projects, they are highly suitable for industry research. If you’re also interested in off-chain cryptocurrency situations and macro comparisons, The Block’s data proves excellent.
Nansen is a platform that enhances the analysis of on-chain data by adding labels to optimize the data. These labels involve tagging various “smart money” entities, such as labeling those who frequently profit from DEX trades as “Smart DEX Traders” or marking addresses with high income and minimal impermanent loss in DeFi liquidity mining as “Smart LP.” According to their official website, they possess a database of 250 million labels. Users can leverage tagged on-chain data to uncover opportunities, conduct due diligence, monitor real-time dashboards, and establish intelligent alerts.
As depicted in the following illustration, Nansen’s primary features require a subscription for access, with a free version offering limited functionalities:
Nansen Interface (Source: Nansen)
Initially, Nansen’s Token and NFT panels facilitate inquiries into fundamental information about tokens and NFTs, identifying key holders and smart money. Once such smart money addresses are pinpointed, observing the actions involving the token from those addresses enables a “copy trading effect.”
GT Data Page (Source: Nansen)
Subsequently, the platform aids in identifying real-time transactions carried out by smart money in on-chain DeFi or NFT activities. The participation of substantial funds can trigger price “pumps” for projects, and astute traders often possess up-to-the-minute insights. This presents an opportunity to seek out alpha. Nansen additionally furnishes address analysis capabilities to evaluate profit status, shifts in asset portfolios, and wallet tracking.
Analysis of Author’s Wallet (Source: Nansen)
Lastly, the monitoring feature allows users to bookmark relevant addresses. For instance, the wallets of project investors can be monitored. If these wallets initiate transfers to exchanges after token unlocks, it could signify potential VC sell-offs. Users can configure specific alert conditions, such as transaction amounts and directions. Upon trigger, notifications can be dispatched to users’ social platforms like Discord.
Nansen’s labeling and alert features heighten users’ sensitivity to “smart money,” expediting the quest for alpha. It preemptively safeguards against significant impacts on project token prices during trading from parties connected to projects or essential stakeholders who hold substantial project assets. Nansen can also be employed to monitor the profitability and shifts within individual wallets, although most functionalities require subscription-based access.
Coingecko is an independent cryptocurrency data aggregation firm that tracks over 10,000+ different crypto assets from 700+ global exchanges. Gecko Terminal is a DeFi and decentralized exchange (DEX) aggregator supported by Coingecko. It organizes data from various trading pairs on DEXs and displays them based on the deployed blockchain.
GT Data Page for Goingecko (Data Source: Coingecko)
For tokens not listed on Coingecko due to recent deployments or not meeting listing standards, users can navigate to Gecko Terminal for queries. Gecko Terminal aggregates DeFi trading information and liquidity pool statuses across various chains. It can track newly deployed liquidity pools, helping users discover trending memes during events like the “meme season.” Liquidity and trading information for recently deployed protocol tokens are also included.
Gecko Terminal Interface (Source: Gecko Terminal)
As illustrated in the “GT Data Page for Goingecko” section, Coingecko’s primary function is to retrieve information related to tokens. Additionally, if you want to understand trading volumes, rankings, and other data for Centralized Exchanges (CEX) and DEXs, you can find them on Coingecko.
Gecko Terminal’s Pool Discovery feature, such as in the image below, reveals that the top-ranking token in terms of trading volume on the Ethereum network is a meme coin with a staggering increase of over 300%. The upper section also highlights the latest liquidity pools added to the chain. Users can follow the “smart money” and invest in new pools that align with meme trends. While the risk is high, the potential rewards could be significant.
Note: Meme coins carry higher risks compared to general cryptocurrencies and are highly susceptible to dropping to zero. This does not constitute investment advice.
Ethereum Liquidity Pool Transaction Count Ranking on Gecko Terminal (Source: Gecko Terminal)
Gecko Terminal also offers insights into price movements and liquidity pool depths for some tokens not listed on Coingecko. In addition to price and liquidity pool depth, Gecko displays contract data and real-time trading for projects.
Regarding fundamental information, Coingecko’s compilation is comprehensive, and even missing information can be supplemented by referring to other sources via navigation. For cryptocurrency beginners, Coingecko offers low entry barriers and easy-to-understand data. Meanwhile, Gecko Terminal aggregates transaction information within DeFi, making it particularly suitable for identifying early-stage liquidity pools.
The six tools mentioned above also face competition from other alternatives. For instance, Messari is also a comprehensive platform integrating media and data. There are several specialized data analysis platforms in the market as well. Platforms like NFTgo and NFTscan specifically analyze NFTs, while platforms like Degame and Playtoearn focus on GameFi analysis.
However, the choice of tools is just the foundational step. In practice, on-chain data analysis often requires a combination of tools. For example, after tracking “smart money” addresses involved in a new DeFi protocol on Nansen, one can query the TVL of that DeFi on DeFillama and use a blockchain explorer to find other participants. Dune can be used to compare with other similar DeFi protocols, and Coingecko can be consulted for the token price of that DeFi protocol.
Simultaneously, users need to maintain a certain sensitivity towards the data. For instance, during the Ethereum “Shanghai Upgrade,” the TVL of multiple LSDFi projects surged, possibly leading to a surge in the tokens of these projects. Developing an attitude of sensitivity towards data, suspicion of anomalies, curiosity towards new data, and learning to comprehensively utilize various tools are essential for producing useful on-chain data analysis.
The on-chain trading market is continuously expanding, and the majority of tokens/NFTs in the market are issued and traded on-chain. The increase in on-chain activities signifies early project participation and investment, the discovery of macro trends, and the stimulation of the on-chain ecosystem. It is foreseeable that future on-chain activities will become even more dynamic. Whether it’s project research, asset investment, or Web3 innovation and entrepreneurship, these practical data analysis tools are indispensable.
Disclaimer: The various analyses mentioned in this article are provided as examples and do not constitute any investment advice; they are solely for educational purposes. On-chain activities involve significant risks. Please consider your risk tolerance before participating.