On-Chain Analysis with Nansen

Photo - On-Chain Analysis with Nansen
Nansen is an analytical platform that offers deep insights into token movements, NFT activities, and categorizing crypto wallets belonging to banks, exchanges, and major investors, thereby significantly enhancing data handling. Investors leverage Nansen to spot whales, manage portfolios, and delve into on-chain investigations.
Nansen was launched in April 2020 under the leadership of Alex Svanevik. The project has established its headquarters in Singapore, boasting a team of around 150 professionals. It is named in honor of the renowned Norwegian explorer and Nobel Peace Prize winner, Fridtjof Nansen.

What issues does Nansen address?

While the blockchain is a transparent ledger where fund flows, balance checks, and NFT ownership can be tracked by anyone, the technology’s inherent anonymity makes it a challenge to identify wallet owners without explicit consent.

Prior to Nansen, blockchain explorers like Etherscan and Blockchair were the primary tools available. These platforms offered user-friendly interfaces for transaction tracking and balance viewing. However, their focus was limited to specific blockchains: Etherscan for Ethereum and Blockchair for Bitcoin.

The need for more comprehensive on-chain analysis became apparent. Users found themselves navigating through multiple explorers, a process both laborious and less effective compared to automated solutions.

Additionally, explorers couldn't disclose crypto wallet ownership, a crucial piece of data for informed investing decisions. The impact of token exchanges varies significantly depending on whether they occur between individual users or exchanges.

Nansen emerged in this context. While it does not reveal the private identities of wallet owners, except for public figures like Justin Sun or Vitalik Buterin, it categorizes them based on balance, profit, incoming transactions, and more.

Nansen, initially focused on wallet segmentation, has evolved into a full-fledged platform for comprehensive on-chain analysis.

On-chain analysis with Nansen opens up various possibilities:

  1. Detecting early market trends, as funds often keep investment amounts and directions confidential. However, these transactions can be traced on the blockchain.
  2. Assessing investor sentiments, not just in terms of position accumulation or distribution but also in actions like adding tokens to liquidity pools or transferring to/from CEXs.
  3. Whale tracking, which involves understanding the actions of major asset holders to better predict token price fluctuations.

Blockchain data is publicly available, but daily analysis can be daunting. Nansen addresses this challenge by filtering and presenting only the most relevant activity data.
Instead of having 40 different tabs to look at analytics on a specific chain, you get all of the information in one place on the whole information stack,
as Nansen CEO Alex Svanevik puts it.
In addition to these capabilities, Nansen also offers a range of other services, including publishing research materials and providing analytics on crypto wallet yields.

How Nansen Enhances On-chain Analysis

An effective on-chain analysis tool needs to have a user-friendly interface, support well-known blockchain networks, and be able to identify significant transactions. To understand how Nansen achieves these, let’s look at its main features.

Token Paradise

This feature offers insights into the latest trends and significant transactions for all tokens in the Ethereum network. The "Trends" tab highlights current assets with medium and low market caps, including tokens sent to major players' addresses. This feature is available only with a subscription.

Token Screener summarizes tokens based on various criteria. It presents assets in three formats: “Price/Market Capitalization,” “Token Flow,” and “On-Chain Metrics.”

Price/Market Capitalization. Lists tokens sorted by their price or market cap, helping users find the most profitable assets for trading on market trends and the least successful ones for potential purchase at low points.

Token Flow. In blockchains like Ethereum, with over a million transactions daily, Nansen tracks the most important ones, categorizing them as:

  1. Fresh Wallet Flows: Tokens received by newly created wallets, often not belonging to new users but recreated for reasons like maintaining transaction anonymity.
  2. Smart Money Inflow and Outflow: Tokens moving to or from the wallets of major investors.
  3. Exchange Outflow: Represents investor activities on exchanges, where outflows are seen as buying (increasing demand) and inflows as selling (increasing supply).

On-Chain Metrics. An analytical panel based on the activities of various market players, helping to identify popular assets among both regular and major investors.

Token God Mode

Token God Mode Interface for WBT. Source: nansen.ai

Token God Mode Interface for WBT. Source: nansen.ai

This interface lets users explore on-chain data for a specific asset, showing its distribution, quantity in liquidity pools, and flow to or from major players’ wallets. It has four tabs: 

  1. Transactions: Details the largest buyers and sellers of the token, along with transaction volumes for the last 24 hours and 7 days, and includes a filter for major players.
  2. Balances: Lists the largest token holders, showing when the token first appeared in their wallets, and balance changes over the past 24 hours and 7 days.
  3. Exchanges: Tracks token movements on exchanges based on deposits and withdrawals. 
  4. Smart Money: Visualizes a major investor's position in a specific token over time, whether accumulating or distributing.

Besides Token Paradise and Token God Mode, Nansen also has a feature for NFTs, similar in design to the other panels, but focusing on information about NFT collections, rarity, listings, and artists.

Nansen Profiler

Historical Portfolio of WhiteBIT

Historical Portfolio of WhiteBIT's Tokens. Source: nansen.ai

Nansen Profiler offers detailed insights into the asset movements of exchanges or other organizations. Its panel is organized into three categories:

  1. Overview: Consolidates information about all the organization's wallets, including historical token balances and the networks where these assets are held.
  2. Counterparties: A comprehensive list of all wallets that have interacted with the organization, with filters available for time, tokens, and more.
  3. Transactions: Details the inflow and outflow of the organization’s assets, accessible through a subscription.

Nansen Profiler is crucial for deep analysis of a company, often used in choosing a CEX for trading, investigating breaches, and understanding an organization's market influence.

Nansen Portfolio

The interface of Nansen Portfolio illustrated through the analysis of Justin Sun

The interface of Nansen Portfolio illustrated through the analysis of Justin Sun's wallet. Source: nansen.ai

Nansen Portfolio supports analysis across 45 blockchain networks and divides its information display into five tabs: “Portfolio,” “Transactions,” “Analytics,” “Wallet Profiler,” and “NFT Profiler.”

Conclusion: Nansen 2 Public Beta Testing

In November 2023, Nansen initiated the public beta testing of its revamped platform, Nansen 2. Enhancements include an improved user interface, new features, and capabilities such as:

  • Signals: Notifies about significant blockchain events like asset purchases and sales by major players, and exchange operations.
  • Smart Segments: A customized list of addresses based on specific parameters set by the user, like a particular token, NFT, and the range of asset quantity.
  • Dashboard Personalization: Enables users to select and configure the displayed widgets and interface panel.

There's speculation among influencers about a potential Nansen airdrop. Factors that might increase a user's chances of receiving tokens include registering on the platform, connecting a wallet, and purchasing a subscription. Although not confirmed by the Nansen team, the precedent set by the Arkham project suggests this possibility.

Vlad Vovk
Writes about DeFi and cryptocurrencies from a technological perspective.