How L1 Digital AG uses On-chain Data to analyze and evaluate potential investment opportunities

Learn how L1 Digital AG (L1D) uses Nansen Query to conduct research to support investment decisions.

New protocols are being developed at an exponential rate, each claiming to be better than its peers. Selecting potential winners has become increasingly challenging as the industry grows and evolves. To improve the quality of their research and analysis of potential investments, L1D uses blockchain data to sift through the noise. They need a reliable and high-performance blockchain data provider with accurate data that seamlessly integrates with their existing data pipelines and technology stack.

Challenges

Data accuracy

While raw blockchain data is easily accessible, accurately analyzing the various smart contracts and transforming raw data into contextualized tables requires expertise and compilation. As the insights gained from processed data can inform investment decisions, accuracy and coverage are paramount.

Platform reliability and speed

Slow query processing speed and frequent timeouts were major problems in alternative solutions. Complex queries will take too long to execute and in many cases will not complete. This will make their research process extremely inefficient and hamper their analysis.

Ease of integration and support

Since the firm already built existing data pipelines on top of Google’s BigQuery, they wanted a vendor that had out-of-the-box integrations with their existing stack. The lack of such capability will greatly increase the internal engineering effort required to integrate external data sources into their workflow. L1D also wanted the option to collaborate with and leverage the expertise of blockchain data experts for future research. Such an offer was not readily available among other data providers.

“Data providers we tested were too slow and frequently crashed when we tried to run complex queries needed for our research. Additionally, integrating their data into our existing pipelines was a challenge. These issues have made these vendors difficult or even impossible to use in our workflow.” – Alex Miloski, Investment Research, L1D

Solution

L1D integrated Nansen Query’s data into their existing data pipelines to create reports and perform analysis on potential investments. “Nansen was the clear and best choice for our data needs,” said Alex. “Integration was seamless, greatly reducing the internal effort needed to get things up and running.”

Impact

Data-driven investment decisions

The L1D research team is able to execute complex queries at a fraction of the time it would take without fail on other platforms. As the team mainly focuses on investing in post-launch projects, the ability to understand what is actually happening in the chain helps their due diligence process. Among other things, the team uses on-chain data to measure user and activity growth as indicators of product market fit. The insights gained from the data are an important part of their decision-making process.

We rely on Nansen for most of our chain data needs. This has empowered us to make more informed investment decisions. This is an important part of our research and due diligence process. – Alex Miloski, Investment Research, L1D

Ready to improve your decision making using blockchain data? Contact us to learn more!

Note: L1D is the investment adviser to a fund that has invested in Nansen.

Disclaimer

The authors of this content and members of Nansen may participate or invest in some of the protocols or tokens mentioned herein. The foregoing statement serves as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Nansen does not recommend any specific course of action with respect to any token or protocol. The content herein is intended for educational and informational purposes only and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is offered to induce or attempt to induce any reader or other person to buy, sell or hold any token or to participate in any protocol or to enter into any agreement for or with ‘ an eye on buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are entirely generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and consider their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein are subject to change by Nansen at any time without notice. Nansen accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.

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