🧘♂️SPOTTED: Follow The Smart Money
Market Meditations | September 15, 2021
How To Track Crypto Billionaires
We’re seeing BTC recovery after a volatile week. It’s trading up about 3% vs. the 24 hours. DeFi coins are also trading in the green. However, so-called ‘Ethereum Alternatives’ such as Solana, Avalanche, Cosmos and Algroand have taken a bit of a hit off the back of yesterday’s technical issues.
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? Search For The Sol-Ution
If you attempted to use the Solana ecosystem yesterday, you may have encountered a problem; it was not operational. According to Solana Status, the Solana Mainnet encountered a large increase in transaction load, flooding the transaction processing queue, which caused the network to start forking. Because engineers could not stabilize the network, the validator community elected to restart it. Solana also experienced an outage in December 2020.
This is not the first time that a blockchain network has gone down, although it does become more difficult the more decentralized the network is (this isn’t even the only protocol that went down yesterday, as Arbitrum was also down for a short time.) Although Solana and Arbitrum are not the first blockchains to suffer outages or forks, as many users pointed out, there are now billions of dollars at stake.
What could go wrong?
When Solana does restart, decentralized exchanges will have stale price information.
Many experts in DeFi may try to arbitrage the price differences, which could overload the system again.
Leveraged derivative markets could become under collateralized, resulting in liquidations.
The Solana outage could prove to be a worthwhile lesson in multiple ways; reminding us that there is always a risk when deploying capital and that these protocols are still in a test phase so literally anything could happen. Solana has many big names behind it, so it is unlikely to fall by the wayside and the ecosystem and TVL have been growing exponentially, so the sooner they work out any bugs, the better.
Our Market Meditations are longer format educational segments. Each letter features a Market Meditation which will deep dive and analyse a relevant crypto event, theme or tool.
? Following the Smart Money
NFTs have been one of the hottest narratives in the crypto markets, with parabolic price increases occurring across the space. But, the market is currently trending downwards in both price and liquidity. An ill equipped investor may therefore conclude that there are no opportunities.
?However, this is not the case! With Nansen1, you can find trending projects that represent strong profit opportunities. Today we do exactly that by looking into their market cap, volume and smart money tools.
1️⃣ Market Cap
A quick look at the top projects by market cap (average price of an NFT multiplied by the number of NFTs in the collection) reveals that although 4 of the top 5 biggest projects are trending downwards, VeeFriends (no.3 by market cap) is trending upwards. Not only this, yesterday saw the highest volume traded in the past month.
Table 1: VeeFriends Average Price & Volume (Source Nansen)
Why is this the case? As well as a constantly evolving narrative and ecosystem which continues to push the price of VeeFriends up, it was announced yesterday that 5 of the original drawings are to be auctioned at Christie’s Auction House – one of the most famous high end auction houses across the globe. This came directly after Friday’s announcement that the 2022 VeCon Conference will only be open to VeeFriend holders.
2️⃣ Volume and Smart Money
A quick look at the top projects by volume (the total value of all NFTs traded in Eth) reveals that Cryptoadz is the hottest project in the last 24 hours, with over 3,000 Eth ($10m) traded. We know Gary Vee is behind VeeFriends and that he has a strong track record, so we would like to know who is involved in Cryptoadz too. Fortunately, with Nansen, we can get an idea of the notable owners:
Table 2: Cryptoadz Notable Owners (Source Nansen)
We can see this project is backed by a number of notable wallets and that they have not on aggregate been exiting the project. The labels show you exactly what kind of well informed wallets are involved and to understand what these labels mean, check out Nansen’s wallet label guide.
As ever in crypto markets, profit can be found anywhere, if you know where to look. With Nansen, opportunities can be found easily, so that you can focus on maximizing your returns.
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? Go With The Flow
Googleannounced this week that they are partnering with Dapper Labs to assist them in scaling their Flow blockchain, with the governance token $FLOW jumping just under 20% on the news. But who are Dapper Labs and why are Google getting involved?
Dapper Labs is a start-up developer company that launched some of the most famous NFT games and collectibles out there, such as CryptoKitties and NBA Top Shot.
After the highly-popular CryptoKitties severely congested the Ethereum network in 2017, Dapper Labs set out to build their own blockchain, which would be dedicated to the NFT market and the games and apps that used them.
Collector Nodes increase efficiency
Execution Nodes enable speed and scale
Verifier Nodes guarantee correctness
Consensus Nodes ensure decentralisation
Google’s partnership will help Flow to scale the blockchain for the future, through use of Google Cloud as a network operator.
Roham Gharegozlou, the CEO of Dapper Labs announced that there are now more than 3000 developers building on the blockchain, who can now access nodes at lower latency.
For Google, it is a big step into the Web 3 world and a chance to capture some of the cloud-based market for blockchain nodes. A report from two years ago showed that there are already more than 60% of Ethereum nodes running on cloud services of the major tech players, such as Amazon and Microsoft.
??♂️✍️ Stories in this newsletter were written by D. Beverly, Isambard FA, Nick T., Max P., Kimia K., Ellen B. and Koroush AK. Graphics were produced by Gerasimos P.
Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here.
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Currently Nansen provides NFT data from the Ethereum blockchain and as such the metrics discussed do not account for NFTs on other chains