Nansen Makes Sense of On-Chain Activity

Being able to spot trends in on-chain transactions gives users insight and information to navigate the cryptocurrency financial system. Making transparency practical is why Nansen is one of CoinDesk’s Projects to Watch 2023.

AccessTimeIconApr 17, 2023 at 12:10 p.m. UTC
Updated Sep 28, 2023 at 2:23 p.m. UTC

The problem

Blockchain technology has been billed as the great transparency provider. It 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 occurring, the crypto space is filled with distracting noise that makes it hard for users, developers, traders and organizations to make informed decisions based on the data.

Even when users drill down 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 the equivalent to account identification numbers.

Projects have made strides in gleaning 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 investigation 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 exchanges or banks, for instance. The latter could even be criminal.

Without identifying or doxxing the owner, could the public learn more about the address?


Read profiles of all of the Projects to Watch 2023: Reclaiming Purpose in Crypto

The idea: Nansen

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

Svanevik is a data scientist. He saw viral tweets from people who noticed, say, that $200 million of USDT moved from one address to another and wondered who were the owners of those addresses. The blockchain was transparent insofar as people could see capital moving and how much but couldn’t develop an understanding of why, without knowing anything about the addresses.

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

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

Their goal from the beginning was attributing, characterizing or labeling addresses, which is a difficult challenge simply from the volume of data. They had to figure out how to sort data from multiple different blockchains as well as various layer 2s, and put the data into a form consumable for analytics.

What’s in a label?

Nansen’s homepage states the company has labeled 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, heavy decentralized exchange trader or private investor. Moreover, Nansen adds an emoji to let users know whether a wallet is a smart contract or an exchange.

Nansen has over a hundred names in its toolbox and each wallet can be tagged multiple times. It uses labels, however, and typically doesn't doxx people or reveal private identities, a Nansen blog post states, in keeping with the crypto ethos of privacy and a respect for anonymity.

Nonetheless, many wallets are publicly known, such as those belonging to well-known 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 naming wallets, users can see crypto market maker Wintermute withdrawing millions of wBTC from Coinbase, when Justin Sun trades on a decentralized exchange or when a legendary non-fungible token (NFT) collector purchased several PFPs from the Milady Maker.


Instruments and controls

Building on its labeling abilities, 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 specific token by showing the token’s distribution and activity on different exchanges, among other things.

Exchange Flows is another dashboard that shows users what wallets are interacting with exchanges, what tokens are flowing to and from exchanges as well as each exchange’s netflow 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 from flipping (defined as buys and sells within a selected time period) and the most popular NFT contracts in the past 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 specific chain, you get all of the information in one place on the whole information stack,” Svanevik said.

Future of finance

Nansen is headquartered in Singapore and has roughly 150 employees across 38 countries. Svanevik said he sees Nansen as an important player in the future of finance. Several investment firms showed they agree. Accel, GIC (Singapore’s sovereign wealth fund), Andreessen Horowitz (a16z), Tiger Global and SCB 10X, have 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 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 the key to building, Svanevik said.

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

Edited by Daniel Kuhn and Jeanhee Kim.


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Sage D. Young

Sage D. Young was a tech protocol reporter at CoinDesk. He owns a few NFTs, gold and silver, as well as BTC, ETH, LINK, AAVE, ARB, PEOPLE, DOGE, OS, and HTR.