Nansen: Blockchain Analytics Brings Transparency with Address Tagging and Trendspotting – Crypto Projects to Watch for 2023

Blockchain technology is considered as the great transparency provider. This is the foundation for an open transmission system where every transaction is recorded for anyone to see. But the reality is that with so many transactions taking place, the crypto space is filled with distracting noise that makes it difficult for users, developers, merchants and organizations to make informed decisions based on the data.

Even when users check to analyze a single transaction, the transparency is typically limited to the blockchain, date, time, amount traded and the addresses of the two parties, which are equivalent to account identification numbers.

Projects have made progress in deriving useful information from this data. Etherscan, a block explorer, allows users to search and browse an address’s transaction history. Chainalysis, a platform focused on anti-money laundering, lets people use their investigative software to monitor transactions in real time, for example.

And yet understanding transactions is a challenge when the two parties are unknown and addresses are not identified. Two identical trades can be perceived differently if the parties in one are individuals and the parties in the other are, for example, exchanges or banks. The latter may even be criminal.

Can the public learn more about the address without identifying or doxxing the owner?

The inspiration for Nansen came from Crypto Twitter, said Alex Svanevik, CEO of Nansen.

Svanevik is a data scientist. He saw viral tweets from people who, for example, noticed $200 million of USDT moving from one address to another and wondered who the owners of those addresses were. The blockchain was transparent in that people could see capital moving and how much, but could not develop an understanding of why without knowing something about the addresses.

“We saw two needs in the investor and builder camp where people could understand their own ecosystem and build better products,” Svanevik said.

Named after the Norwegian polymath and Nobel laureate Fridtjof Nansen, Svanevik and two fellow data scientists, Lars Bakke Krogvig and Evgeny Medvedev, launched the blockchain analytics platform Nansen in April 2020. Krogvig and Medwedef led engineering efforts focused solely on building, while Svanevik led business. strategy and fundraising.

Their goal from the beginning was to assign, characterize or name addresses, which is a difficult challenge simply from the volume of data. They had to figure out how to sort data from several different blockchains as well as several layer 2s, and put the data into a form that is usable for analysis.

Nansen’s homepage says the company has tagged more than 250 million addresses across 10 different blockchains.

Based on a specific wallet’s behavior and activity, Nansen will use algorithms to infer the type of user and tag wallets with a descriptor such as a fund, heavily decentralized exchange trader or private investor. Additionally, Nansen adds an emoji to let users know if a wallet is a smart contract or an exchange.

Nansen has more than a hundred names in his toolbox and each wallet can be tagged multiple times. However, it uses tags and generally does not doxx people or reveal private identities, says a Nansen blog post, in keeping with the crypto ethos of privacy and a respect for anonymity.

Nevertheless, many wallets are publicly known, such as those belonging to famous figures including Justin Sun and Vitalik Buterin, and companies such as Wintermute and Jump Trading.

Nansen allows users to have a deeper insight into what is happening on the blockchain in real time. By mentioning wallets, users can see crypto market maker Wintermute withdraw millions of wBTC from Coinbase, when Justin Sun trades on a decentralized exchange or when a legendary non-fungible token (NFT) collector buys several PFPs from the Milady Maker has.

Building on its labeling capabilities, Nansen provides dashboards with sophisticated tools to analyze the data. One particularly useful dashboard is called Token God Mode, which allows users to do a deep dive into a particular token by showing the token’s distribution and activity on different exchanges, among other things.

Exchange Flows is another dashboard that shows users which wallets are interacting with exchanges, which tokens are flowing to and from exchanges, as well as each exchange’s net flow of total tokens.

Nansen even has a dashboard called NFT Paradise that shows users recent sweeps (defined as the purchase of at least three NFTs in a single transaction), most profitable collections of flips (defined as buying and selling within a selected period) and the most popular NFT contracts in the last seven days.

Token God Mode, Exchange Flows and NFT Paradise are just three of several dashboards on Nansen that cut through the noise to allow users to focus on insights within certain parameters. “Instead of having 40 different tabs to look at analytics on a particular chain, you get all the information in one place on the entire information stack,” Svanevik said.

Nansen is headquartered in Singapore and has approximately 150 employees in 38 countries. Svanevik said he sees Nansen as an important player in the future of finance. Several investment firms agreed. Accel, GIC (Singapore’s sovereign wealth fund), Andreessen Horowitz (a16z), Tiger Global and SCB 10X, invested a combined $88 million, according to Svanevik.

He said he hopes by 2035, the crypto community will have “built a new financial fabric for the world so that traditional finance will be replaced with blockchains.” And Svanevik is willing to do his part to make that happen. “That future doesn’t happen by itself,” he said.

Transparency is key to building, Svanevik said.

The first step is to make sure that pioneers entering the crypto space – builders, investors, traders – succeed. “If we can help them get the best information so they can see success, they will reinvest in the industry. And if they reinvest in the industry, then the whole industry flourishes. … You get new companies and projects that are realized to build this future that we all want,” Svanevik added.