Guide to Smart Contracts
Market Meditations | May 4, 2022
? It’s Getting Hot In Here
Hot Smart Contracts
DeFi is built using smart contracts – a computer program which automatically executes specific actions based on a pre-defined trigger. For example an agreement between a borrower and a lender that dictates the terms for repayment.
Using Nansen, we are able to see the see exactly how much money is flowing into individual smart contracts, allowing us to spot the hottest protocols and opportunities:
Nansen: 04/05/2022 – Hot Multichain Contracts sorted by 7 day inflow
- The biggest inflows have been into Anchor Protocol’s bETH converter. Anchor is the largest protocol on Terra and bETH represents stETH (staked ETH on Lido) on the Terra blockchain. This indicates that the market is taking advantage of opportunities on bETH.
- The second largest inflow has been into PancakeSwap, specifically staking their native token CAKE, an opportunity currently offering up to 160% APY.
✅ Tip: We can filter the data by Smart Money depositors to see exactly which hot contracts have received the most deposits from the top performing wallets in crypto.
Tracking the Activity of Top Wallets
Now we have identified protocols that are receiving large inflows, we can use Nansen to further inform our profit strategies. Let’s use the PancakeSwap staking pool as an example.
By using the Top Depositors feature demonstrated in part 1 we are able to identify who is currently involved in the opportunity and can see that one of the most well known personalities in crypto currently farming the pool, Justin Sun. From there we can find his exact activity regarding the pool:
Nansen: 04/05/2022 – Wallet Pair Profiler – Justin Sun and PancakeSwap CAKE staking pool
- 13 days ago, Justin Sun deposited 303k CAKE ($2.3m) into the pool and has not made any other transactions since, showing he is still taking advantage of the opportunity.
The DeFi ecosystem is constantly shifting and protocols which offer the highest yields change quicker than anyone can keep track of, without the correct tools. Using Nansen, we are able to quickly find the hottest protocols, signposting potential opportunities for profit.