Last chapter, we touched briefly on how by using Nansen, we can look at transactions through a different lens, gaining more insights. But who is @nansen_ai? And what role do they play in this?
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2/ Put simply, Nansen is an on-chain analytics platform. Their strength is their ability to label wallets and attribute them to certain market participants such as Funds, Smart Money, Whales and many more.
3/ This means that you are able to track the movement of wallets that are more in the know. When they buy a token. What they buy. When they yield farm. Where are they farming. When they sell. What are they selling.
4/ As an individual investor and a small crypto fund, our resources are limited. Time, capital, mental space. Hence, we have to be strategic when it comes to allocating capital into projects, allocating time and mental space into researching projects.
5/ So how do we use this information to our advantage?
6/ When I spot a fund buying a token that is new to me, I start researching the project. This project will sit on the top of my research list and I will not move on to the next one until I make a decision on whether the token is a buy or if I will pass on it.
7/ When I have the same position as a fund, I watch the position closely so that when they sell, I can reassess my position. Is there a catalyst? Is there something I am unaware of? Should I hedge my position until there is more clarity?
8/ When I see large capital flowing into a staking or liquidity pool, who are the market participants that are involved in this as well and are they worth following. And when they are out, I follow along.
10/ Thanks to the labelling from Nansen, you are able to better allocate your resources. With so many projects coming up in the crypto space, it is close to impossible to know about every project without compromising other aspects of your life.
11/ This is where tools like Nansen come in to make our lives easier, focusing only on projects that manage to attract the capital of Smart Money.
12/ For the whole guide, head over to -
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