Zima Red ep 104: Alex Svanevik - Nansen: NFT Alpha Via On-Chain Data
Primer: Alex Svanevik is the Co-Founder of Nansen, a blockchain analytics platform for investors and traders in the crypto space. In this episode of the Zima Red Podcast, Alex discusses his background, what led him to found Nansen, the products that they have, and possible future products.
Background in artificial intelligence/machine learning
Did a few years of management consulting
Started an AI consultancy company in 2010
Worked as a data science manager for 4 years at a European media group
In 2017, he learned about Ethereum
Left his job to start working in crypto full-time
Did some work with 0x
Founded Nansen at the end of 2019
Learning About AI
Studied cognitive science for his Bachelor’s degree. The program discussed about AI
“I think I always had like a deep fascination for AI.”
- Alex Svanevik
Did a Master’s in AI at the University of Edinburgh
It is philosophically interesting and the career prospects were good
Describing AI To The Laymen
Most AI stuff that happens today is through machine learning
At a high level, it is the creation of artificial systems that can think or act rationally and respond to the environment in intelligent ways
For a long time, people tried to program machines to be intelligent but it did not scale well
Needed to have learning algorithms to get artificial intelligence systems
The term “data science” has also been used to describe machine learning. These concepts overlap with one another
Learning About Ethereum
Learned about Bitcoin in 2013 but did not find it interesting
When Ethereum came out, there were 2 things that he liked about it:
Ethereum was a platform and could be a contender to what Bitcoin might be
Ethereum enables permissionless innovation
When Did He Decide That He Needed To Build Something In Crypto?
Crypto is both intellectually stimulating and appeals to the greed of people
In 2017, a colleague of his had talked to someone who said that he did not know of any Solidity developer who’s not a millionaire
Solidity is the programming language that’s used to create apps on Ethereum
The market had demand for those with technical know-how to join the space
“I guess we reflect a bit on that and thought, well, the market is kind of screaming for us to have someone who has a bit of technical know-how, and so on, to join this space, right? There's a lot of demand for it.”
- Alex Svanevik
Joined crypto 6-7 months later at a startup in Hong Kong
What Did He Do At That Startup?
Was the 2nd employee at the market intelligence startup
Idea was to aggregate as much information about the crypto space and offer it to users
The company had a token
Was difficult to build a good product and fit the token into it
His job was to build out the data team
They did not manage the treasury well and when the bear market arrived, his team was laid off
What Happened After That?
Had Evgeny, who is one of his co-founders
Had a research engineer and a data engineer who came on board Nansen later on
Operated in the same space as that startup did, except they have a laser focus on on-chain data
A blockchain analytics platform for investors and traders in the crypto space
Helps customers discover new opportunities, perform due diligence, and receive real-time notifications on important events on the blockchain
Recently, Nansen has been used a lot by NFT collectors
People often ask him “isn’t the information public?”. It’s partially true and people need at least 3 things to surface the signal from the data:
Pull out the data from the nodes to make it accessible to querying
Transform the data. Each DEX/protocol has their own data format. They need to standardize and harmonize it
Add the real-world contextual layer on it. Involves associating addresses with entities in the real world (e.g. Binance, Coinbase, a16z, Three Arrows, Alameda, etc.)
Why Do They Focus Only On On-Chain Data?
Intellectual curiosity and a fascination for this unique data asset which doesn’t exist in TradFi
Evgeny, his Co-Founder, created Ethereum ETL, which is the most used open source library to pull data from Ethereum to use for analytics
Some of the analytics products on the market try to replicate what is used in TradFi in crypto
For on-chain data, there’s no precedent to it. It is more challenging and they have to create the playbook for it
Their users have discovered things happening on-chain and have benefitted from it
Token God Mode
The first dashboard that became very popular
Users can plug in any ERC-20 token and have a God Mode view on the token:
Who owns it?
What does their cap table look like?
Who are the owners today?
Who has been accumulating the token for the last 7 days?
Who has been selling them off?
Their on-chain data is different from CoinGecko or CoinMarketCap, which uses self-reported data
Deployed NFT God Mode for NFTs
The Smart Money Feature
Smart money is displayed in 2 ways:
Smart Money Dashboard that focuses on the segment of smart money (e.g. what tokens have they been accumulating in the last 24 hours, what tokens have they been getting rid of, etc.)
A feed (e.g. Alameda has approved usage of this token for a new smart contract, etc.)
There’s also smart money wallets. Users could get real-time notifications whenever certain things happen
The Wallet Profiler
Users can plug in an address and get to see its activity profile:
Time of day/week
Time zone they are located in
When they are trading
Before Nansen launched, this kind of intelligence was reserved for on-shore analytics companies that focus on government agencies, tax authorities, etc.
What Other Cool Features Have They Got?
For the past few months, he has been using the NFT Dashboards
NFT are conceptually easier to understand than DeFi
Have a NFT Blue Chip Index. Consists of the top 20 NFT collections
Can drill down to NFT God Mode for specific collections
Has a Mint Master section that shows which NFTs are being minted in real-time
There are also some underappreciated dashboards that people may not be aware of:
Token movements across a specific time period
Top transactions that took place
Token overlap (overlap of holders between 2 assets)
Sandwich Attack Dashboard (see if an address has been the victim of a Sandwich Attack)
Cool Examples Of People Finding Alpha From Using Nansen
Twitter account called MEV Collector
He turned 11 ETH to 862 ETH in 33 days flipping NFTs using Nansen
What Are Some Possible Products They Want To Build In The Future?
The lesson he learned from the startup in Hong Kong is focus
Hard thing is to figure out what not to do
They are reinvesting into the company to become a gateway into the crypto world
Will be serving both the retail and institutional markets
Moving forward, they want to build a stronger institutional offering
Their next product will be an API
Will be adding multi-chain support and cross-chain analytics
Considering enabling transactions through the Nansen interface, but there’s a regulatory aspect to that
Will Quants Or Retail Investors Dominate The Market?
DeFi will be dominated by whales
NFTs are more retail friendly
Funds have been quite slow to get into NFTs
NFTs are unique assets. Buyers have to determine what the price should be for each item in each collection
“If you're a fund, you can't just take this kind of retail mindset of apeing into different collections because you kind of like the aesthetics or because you want to make a punt on it right? You have to be more sophisticated with regards to justifying the investment thesis and so on.”
- Alex Svanevik
Single Favourite NFT
His Twitter profile picture
It’s a Viking Pudgy Penguin with a kimono
Most Controversial Thought On NFTs
Thinks that NFTs are massively underrated
Don’t think that people have understood how big this asset class could be
If He Could Improve Something In The Space
Better user experience for newcomers
Who Is Someone He Look Up To And Why?
Have many people he look up to in this space
CZ from Binance is amazingly successful as an entrepreneur and has done a lot for the crypto space
NFT Ecosystem In 3 Years
Gaming is a short-term/mid-term applications for NFTs
Expect that leading game studios and game developers will use NFTs in their games
Hope to see more music NFTs
Expecting that many top artists would release their own NFTs
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