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April 10, 2022

On-Chain Data Analysis Tools – Gold Mine for Crypto Investors

Knowing how to make use of on-chain data analysis tools like Etherscan can go a long way to find early gems with your crypto...

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Blockchain Explorers vis-Ã -vis On-Chain Analytics

Block explorers are essentially blockchain’s google that enables you to analyze their on-chain data. You can search/query information related to a blockchain and the explorer will return with an appropriate answer. You have both web based and mobile app based explorers. Similar to how you would do a google search, block explorers allow you to search for phrases or keywords to seek information on them.

Cryptocurrencies like bitcoin and ether run on public blockchains where transactions are recorded transparently. Block explorers though, goes one step ahead than our traditional search engines like google, in that it will show the real time information of transactions including the pending transactions – and not just the processed/rejected ones. Asides from transaction status, block explorers also show details such as transaction fee, the block number on which your transaction is added, from/to address of transacting parties, timestamp as in when the transaction was processed by the blockchain network among others.

A Gold Mine for Crypto/NFT Investors

Ok so block explorers help you to track your transaction but what else would you do with it? You could use the explorers to analyze data in a blockchain like Bitcoin and time your buy/sell order for instance. Analyzing this cryptocurrency data is a great way to gain deeper insights into current or historical blockchain events. Investors use this data to find new alpha, or to purchase a DeFi token by analyzing data related to the health of the underlying DApp. Law enforcement use it to bring criminals to justice. Good stuff, right?

Knowing how to analyze on-chain data is a powerful skill to have in this decade. As with anything in a free market, competition abounds in this world but that also means everyone is trying to reach the market by making their (data analytics/block explorer) tools more user friendly. Some of the tools which we will discuss below often uses its API interfaces to talk to a target network and produce a dashboard which summarizes highlights and lowlights of the network at any given time. Ok we are now excited to share some of these awesome tools with you for your perusal.

1. Etherscan

Etherscan is a blockchain guide, a dedicated browser-based platform for viewing and analyzing all data stored in Ethereum. The service allows users to search and verify historical information by address (alphanumeric or ENS-style which is more human readable), transaction hash, block number, token name, etc. Etherscan offers additional resources such as an ETH unit converter, a label word cloud (to find activity by topic, such as “Charity”), a ‘Verify Contract’ tool, and others. Keep in mind that other networks, such as Ethereum’s layer 2 solutions, have their own specialized blockchain search programs, viz :

Arbitrum: Arbiscan

Optimism: The Optimistic Ethereum Explorer

Polygon: Polygon PoS Chain Explorer

Axie Infinity: The Ronin Block Explorer

ZkSync: zkScan

Etherscan is a fundamental resource for any cryptanalyst, as the block explorer makes it easy to parse all the basic details of an Ethereum or Ethereum network based transaction. Then, you can put the big picture together by examining and understanding transaction flows. We will show you how to ‘read’ transactions on Etherscan below.

For example, let’s look at the contract address of Ethereum co-founder Vitalik Buterin. I searched for his public ENS vitalik.eth on Etherscan, and it returned results including his recent transactions page. In the first transaction shown below, we can see that Buterin sent a test transaction of 0.1 ETH to another address, and immediately after that he sent a much larger amount, 199.9 ETH, to the same address.

If we click the alphanumeric characters under “Txn Hash” which is basically Web 3’s version of transaction reference number, we can see all the key details of the transaction. It includes the exact timestamp, transaction fee, ETH value at the time of the transaction, and more.

Check out this helpful glossary of Etherscan-related terms from the Binance Academy to further familiarize yourself with the basics.

2. Dune Analytics

Dune Analytics is a blockchain research platform designed to organize Ethereum data using SQL queries. Note that SQL is the most popular programming language for data management. SQL developers can use the platform to create new Dune Dashboards that track key data on a particular project or topic. For example, in the image above, you can see dashboards tracking activity around OpenSea – Gnosis Safe NFT usage – and so on. However, Dune Analytics is also useful for non-technical users. You don’t need to be a developer to examine the platform’s public dashboards and analyze the data they contain!

So how does a non-developer use Dune Analytics? Identify the project or topic you want to analyze, find it on the platform, and then browse through all the available dashboards at your discretion.

For example, a Dune user recently created Dune Dashboard to track information about “The Idols,” an NFT project whose NFTs are targeting stale ETH (stETH) in Lido. This dashboard is useful for visualizing early activity around the collection. If you want to get ahead with Dune and delve deeper into SQL query strategies, Dune Analytics put together some great useful material earlier this year.

3. Footprint Analytics

Footprint Analytics is a similar service to Dune Analytics, but with a nicer interface and more flexible tool/dashboard settings. This service is designed for those who can’t handle Dune Analytics. Footprint converts difficult to understand raw tables into a visualization of on-chain data without writing SQL. Just click to add a new chart and start enjoying the analysis.

Footprint tracks several exchanges, allowing users to see which address is accumulating or selling certain tokens and how much profit a particular token or portfolio is generating. The platform’s metrics on token usage, engagement and liquidity help you make informed decisions before and after investing in tokens. Likewise, you can view and interpret a complete picture of your assets with a single click and quickly understand the industry standard returns, investment behavior and strategies. For more information on using the platform, see the project documents.

4. Token Terminal

Token Terminal is a crypto-economy analytics platform that aggregates and tracks financial data from blockchains and DApps. “Our goal is to provide access to standardized metrics that allow users to easily assess and compare the performance of different blockchains and decentralized applications,” notes the Token Terminal team. The platform offers a free dashboard where analysts can view project and network revenue metrics, price-to-sales ratios, etc. Token Terminal explains how they determine and calculate all their metrics in their documentation. The weekly rankings of gainers and losers (see right side of image above) are also useful for tracking trends.

Token Terminal can be especially useful for visualizing total blocked value (TVL) in the best DApps across all networks, such as Ethereum, alt-L1s, L2s, etc. You can also use the “Markets” section of the site to explore activity in specific categories, such as credit protocols in general or specific projects like Aave. Users who upgrade to the Token Terminal Pro plan can create and upload their own charts.

5. Nansen

As Nansen data journalist Martin Lee recently explained, “Ethereum ETL is an open-source project that allows users to convert blockchain data into convenient formats such as CSV. Na n sen, whose core team members are the primary developers of Ethereum ETL, uses it to take blockchain data and display it as easily digestible dashboards.”

Nansen also uses a wallet labeling system that makes it very easy to analyze transaction flows. For example, legendary NFT collector ‘Pranksy’ has his primary wallet labeled as shown below.

Nansen’s premium plans start at $399 per quarter, after which you can view the platform’s most popular panels, such as Hot Contracts (big volume movements in 24 hours), NFT God Mode (NFT project analytics), Smart Token Holdings (tracks changes in major wallets) and others. However, Nansen also offers a free trial and a number of public dashboards that you can check out.

Let’s say you’re thinking about investing in the $LOOKS token of the LooksRare exchange, but before you make your final decision, you want to see how OpenSea’s recent stats are doing.

You can go to Nansen’s LooksRare public dashboard and compare the two markets in terms of number of users per 24 hours, daily active users, and so on. You can see in the image above that LooksRare’s number of daily users was trending downward in February 2022, which can affect one’s choice.

For more ideas on how to use Nansen, I recommend reading the article “Blockchain Analytics” by the aforementioned Martin Lee.

6. Context

Context is a channel for tracking notable NFTs activity in real time. You can use the site to track events according to pre-created categories, such as what CryptoPunk holders, FWB members, or well-known crypto-artists are minting/creating. You can also connect your wallet to start personalizing your feed by following specific accounts that you are interested in.

There are at least a couple of people on Twitter who always seem to find the next big NFT project before anyone else. See if they have a public ENS or Ethereum address. If so, go to ‘Context’ and add the address to the accounts you are following. Then whenever that person or team create new projects, you can track and act on what’s happening in your Context feed in real time!

7. Dove Metrics

Dove Metrics is a database of various project funding rounds in the cryptocurrency world. With the help of this service you will be able to find and follow various projects (and possibly gems) at an early stage. You will further be able to track when a particular project of your interest comes out of the shadow of development and becomes public.

Dove Metrics Crypto Fundraising Analysis

There are 3 main tables on this platform:

“Recent Fundraising Rounds” – where you can track full information about recent funding rounds of projects in the crypto world.

“Active Fund Portfolios” – this table contains information about portfolios of different funds, from private investors to tier 1 funds.

“Full Database” – contains several important information about crypto companies and brief description/portfolios of angel investors.

All in all, in our opinion, it is a very useful service that can be used by anyone.

8. Vestlab

VestLab is an analytical service that is a large collection of information about tokenomics, metrics, timing of upcoming token listings and vesting.

The platform has sections with details and deals on Coinlist, Tokensoft and other launchpads. Also, you can view complete information about the tokenomics of a particular project, starting with allocations, and ending with a chart of token splits of different rounds.

Since the platform is extremely clear and intuitive, anyone will be able to immediately use and take away useful and necessary information for themselves.

Conclusion

If you haven’t started using such crypto data analysis tools/explorers, it is never too late. You will still be among the earliest of early adopters cum investors/market analysts. They are powerful and can help you get actionable insights on their own. But when you use some of these tools in tandem, your ability to understand and act on network data increases exponentially.

As the importance of the crypto-economy grows in the world, the ability to analyze data within the network, even in basic ways, will become increasingly useful. Mastering these skills and tools now will give you an advantage over the rest of the world, which can only catch up with you at best in the future.