Beginners Guide to Whale Watching
Market Meditations | May 18, 2022
✌️ Whale Hello There
The first tool we are able to use within Nansen is “top depositors”. This allows us to track exactly who is depositing specific assets into specific yield farms.
To take an example, let’s look at Lido Finance’s new ETH pool on Curve Finance. Lido is a project that allows you to stake ETH, earning yield but also receiving stETH in return which you are able to use in the DeFi ecosystem:
Nansen.ai: 18/05/2022 – Top Depositors of stETH to Curve wETH / stEth Pool filtered by Smart Money
- There is a total of $512m stETH in the liquidity pool.
- Three Arrows Capital is the top smart money liquidity provider, with over 9,724 stETH ($19m) deposited.
- None of the top 6 smart money liquidity providers have had any outgoing transactions showing that they have not withdrawn any stETH from the pool.
Diving Deeper into Three Arrow Capital’s Position
We are also able to dive deeper into Three Arrow Capital’s wallet, to see all movements of stETH from that wallet:
Nansen.ai: 18/05/2022 – Incoming and Outgoing stETH from Three Arrows Capital Wallet
- This shows that there has been 9.72k stETH sent to this wallet with 100% of that then being deposited into the curve pool.
Where there is reward, there is also risk – especially in crypto. For yield farming, risks include volatility of any assets used (even if these are supposedly stable) and smart contract vulnerabilities. A full breakdown can be found in part 1 of our yield farming series.
Following whales is also a risky endeavor. Previous success is not an indication of future success. Additionally, smart money will have large portfolios and any opportunity will be assessed against their own strategy. This means that what might be a good opportunity for a whale, may not translate to a good opportunity for a retail investor.