veDAO Research Institute: Tracking encrypted smart money, the first step towards wealth freedom

Smart money (Smart Money) has always been the focus of attention in the encryption market, and the smart money tracking strategy based on this can indeed provide substantial returns for ordinary encryption investors. The same is true of the crypto market, where the percentage of investors adopting smart money-based crypto trading indicators, strategies, and tools is gradually increasing. Next, veDAO will lead you to understand smart money in the crypto market, and how to track them?

1. What is smart money?

Smart money refers to professional investment institutions or individual investors who have outstanding investment research capabilities and information advantages in the encryption market. They have rich trading experience and excellent historical performance. Generally, they have relatively large amounts of funds and mature investment concepts. The understanding of smart money is more comprehensive and thorough than that of ordinary investors, and the dynamics of smart money have special significance for ordinary investors in the encryption market.

2. Why track smart money?

The high volatility of encrypted assets and the characteristics of serious information asymmetry in the market, and with the increasing number of encrypted assets, the Matthew effect of the encrypted market is getting stronger and stronger, and it is more difficult for ordinary investors to obtain the Alpha of the market, and very few Smart money makes a lot of money instead. This is because smart money has access to information and resources that the average trader cannot easily access, which gives them an edge in the cryptocurrency market. For ordinary crypto investors, tracking smart money in the crypto market can identify market trends earlier and discover more and better investment opportunities in a timely manner, so as to obtain the same return as smart money or narrow the gap with smart money.

3. How to track smart money?

In the encryption market, due to the open and transparent nature of the blockchain, users can view every transaction on the blockchain. After processing and screening the data, from a theoretical and practical point of view, transactions by smart money can be identified from.

To track smart money, you first need to discover and search for smart money. This requires investors to use blockchain browsers or smart money-related third-party tools to select smart money that suits them based on their own goals and needs. Screening smart money is mainly based on its past on-chain interactions, transactions and other on-chain information, and selects according to its transaction or interaction type, quantitative historical performance evaluation indicators, capital flow and interaction protocols and other behavior patterns; secondly, find smart money , the next step is to track smart money, and can choose to fully copy tracking. For ordinary crypto market investors, tracking smart money can rely on their transactions or completely copy their portfolios, thus directly benefiting from their insights and skills, thereby Get twice the result with half the effort in the transaction, and obtain the alpha of the encrypted market more efficiently.

But it's important to note that not all smart money is as smart as it appears. It is generally unwise to blindly copy all of their trades without in-depth research, as these traders tend to enter the market at lower prices, while subsequent traders are in different market conditions. At the same time, some smart money has multiple accounts, and the behavior of a single account cannot represent the real behavior of smart money. It is still difficult to determine how many accounts a smart money has. A better approach is to take the tracking of smart money strategies as an important reference dimension, and make investment decisions in combination with other indicators and analysis. Currently, there are many tool platforms dedicated to tracking smart money in the crypto market. Here, veDAO screens out 5 simple but powerful options for you.

3.1、Nansen

As one of the most well-known blockchain analytics platforms for tracking smart money, Nansen provides an easy way to research popular projects, new trends, and important on-chain behavior. The platform offers a variety of free tools while allowing traders to delve deeper into individual projects, smart contracts, and wallets. Its most relevant feature is called "smart money," which, as its name suggests, allows you to track the behavior of a large number of tokenized wallets on-chain.

The Nansen Smart Money Tracker provides three main types of information about smart money (or addresses) activity on-chain:

• DEX trading: track the trading behavior of smart money in the top DEX market
• Transfers and Interactions: Track all recent transfers by Smart Money, and the contractual agreements they interact with.
• Token Holdings: Explore Smart Money's token holdings and their profitable leaderboards

Importantly, Nansen's smart money tracker allows users to filter smart money addresses, including specific types, such as funds, smart DEX traders, airdrop experts, smart NFT traders, IDO experts, staking experts, and more. This helps users refine their searches, including custom transaction types that users are interested in.

Nansen's smart money tracker is currently only available to paying users, and the price is relatively high. However, Nansen does offer a $9 7-day free trial that can be used to assess its value to users.

3.2, Dune+Debank

Dune Analytics is a user-driven blockchain analytics platform where anyone can create their own dashboards and share them for others to use. The platform offers a plethora of community-created dashboards that users can utilize as part of their trading decisions. Through in-depth research, veDAO has identified two of the best dashboards that can help users identify and track smart money.

A. Token God Mode Dashboard

This one was created by a user named defimochi. This tool allows users to look up large amounts of data on a particular coin that the user is interested in, helping the user find smart money that might trade that coin.

Link:

By entering a token address, selecting a tracking time frame (e.g. past 30 days), and selecting the relevant blockchain, the dashboard will present a list of the 100 most profitable transactions (among other data). Users can then browse this list and manually filter out MEV bots to find the real smart money traders, those who make the most profit from their trades.

Users can then copy and paste their wallet address into DeBank where you can find out about their current token holdings and their recent transactions. Through this information, users can get some clues about their trading and investment strategies.

Link:

B. GMX Trader Leaderboard Dashboard

This dashboard was created by a user named adamzjw to identify smart money traders by profit or profit/loss ratio. Users can then enter their addresses into DeBank or other portfolio tracking tools to further analyze their on-chain behavior.

Link:

3.3、CryptoRank

CryptoRank can be used to detect new trends in recent funds. Although the platform does not provide instant on-chain analysis like the above tools, CryptoRank provides a large amount of data that can be used to mine new market trends and opportunities. The platform offers a variety of tools and trackers to help users gain insight into the market and see where their money is currently invested.

For example, the function of Crypto Funds and Investors can be used to gain insight into the investment strategies of well-known funds and angel investors. This tool allows you to browse the portfolios of a large number of VC funds, angel investors and independent traders and see how they are currently performing. Users can also see a list of recent projects and recent funding rounds, showing new projects (and established projects) that have recently received funding, along with details of the entities involved.

This helps users understand where smart money thinks the market is going, thereby enabling users to make more informed investment decisions.

For a more general view of smart money in the crypto space, CryptoRank also offers a variety of charts that highlight important data such as monthly fund movements, most popular investment classes, and most active funds, among others.

3.4、Arkham

Arkham, which lets users find the most profitable traders, is a relatively new on-chain analytics platform. The platform does not automatically provide smart money wallet addresses, and users need to search for them themselves. The platform provides a wealth of information that users can use to find smart money through some investigation. Users can easily find a list of active smart money traders by using its trading filters, and then further filter out the current leading traders.

For example, by filtering the results to only transactions within the last hour, with a minimum value of $50,000, and only transactions made by funds, users can see a list of recent large transactions made by smart money.

Users can then browse this list to find new or established crypto assets that are popular with smart money traders, or to find particularly active wallets that may require further investigation. After identifying a potential smart money, you can simply click on its tag or wallet address to access a wealth of additional data, including a graph of its recent profit/loss.

By browsing through several smart money and comparing them based on recent profitability, users are able to find a suitable smart money wallet address that the user is willing to track. From here, users can view their current on-chain holdings, check their portfolio, or scan their recent trades to analyze their trading strategies.

Arkham project official website address:

3.5、Chainanalysis

Chainalysis helps users track the behavior of smart money and provides information about market participants and investment strategies by tracking and analyzing transaction activity on the blockchain. This can help users make more informed investment decisions and better understand market dynamics.

Using its proprietary analytical tools and techniques, Chainalysis can track and analyze transaction activity on the blockchain. Smart money transaction patterns and behavior can be identified, as well as relationships between smart money and specific projects or entities.

Chainalysis' platform can help users understand the investment strategies and behaviors of smart money, as well as their influence in the market. Users can gain insight into market trends and investment opportunities by analyzing smart money transactions and holdings.

By tracking the movement of smart money, Chainalysis can provide detailed information on market participants, including investors, funds and traders. This information can help users understand the dynamics of the market and make more informed investment decisions.

Chainalysis platform address:

In addition to the above 5 tools, veDAO Research Institute has also summarized several other commonly used tools for you to help you find smart money more easily.

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