We finished another analyst report and studied one of the most sensational blockchains of its time. It is the Internet Computer Protocol and the ICP token. If anyone is hearing about it for the first time, here are a few facts:
1️⃣ the team has developed a unique technology that allows information to be computed and stored on decentralized nodes in the blockchain, rather than on the servers of large data center operators like Amazon Web Services, Microsoft Azure and Google Cloud;
2️⃣ the cost of storing data in the Internet Computer blockchain is hundreds of times less than in other blockchains;
3️⃣ the technology allows you to interact with other blockchains directly, without the help of bridges;
4️⃣ back in 2018, developers raised about $200 million in investment;
5️⃣ despite its age, blockchain still has a poorly developed dapps ecosystem; TVL is virtually non-existent.
A scandalous story involves the launch of the ICP token. A month after the event, the price of the token collapsed by more than 90%. ICP lost about $300 billion in capitalization. At the peak of FDV (fully diluted value), the token was in third place after BTC and ETH. In terms of market capitalization, it was worth as much as Mastercard, Bank of America or PayPal. The losses of investors amounted to hundreds of millions of dollars.
But the story does not end there, the denouement is very interesting. It's very much like a spy blockbuster with secret video footage, gangsters, and religious sects.
We tried to find out all the facts to have a complete picture of blockchain. And drew conclusions about whether it is worth investing your money in it.
The report turned out to be interesting and very informative.
#ICP
1️⃣ the team has developed a unique technology that allows information to be computed and stored on decentralized nodes in the blockchain, rather than on the servers of large data center operators like Amazon Web Services, Microsoft Azure and Google Cloud;
2️⃣ the cost of storing data in the Internet Computer blockchain is hundreds of times less than in other blockchains;
3️⃣ the technology allows you to interact with other blockchains directly, without the help of bridges;
4️⃣ back in 2018, developers raised about $200 million in investment;
5️⃣ despite its age, blockchain still has a poorly developed dapps ecosystem; TVL is virtually non-existent.
A scandalous story involves the launch of the ICP token. A month after the event, the price of the token collapsed by more than 90%. ICP lost about $300 billion in capitalization. At the peak of FDV (fully diluted value), the token was in third place after BTC and ETH. In terms of market capitalization, it was worth as much as Mastercard, Bank of America or PayPal. The losses of investors amounted to hundreds of millions of dollars.
But the story does not end there, the denouement is very interesting. It's very much like a spy blockbuster with secret video footage, gangsters, and religious sects.
We tried to find out all the facts to have a complete picture of blockchain. And drew conclusions about whether it is worth investing your money in it.
The report turned out to be interesting and very informative.
#ICP
A week ago we finished a report on the Flow blockchain. Many of you have probably heard of it, some of you are holding a native blockchain token - FLOW. I won't write much, I'll just say two important facts.
1. Anyone who closely follows the development of web3 knows that NFT is a very powerful and promising technology. Already now non-interchangeable tokens are selling for hundreds of millions of dollars. There are collections that have already generated a billion dollars in sales. This is the NBA Top Shot, released on the same Flow. So everyone who wants to earn on cryptocurrencies, we advise to look more closely to the market NFT. Feel free to consider this as financial advice, I fully believe in it.
2. The second fact will be useful for those who hold FLOW tokens. Keep in mind that Dapper Labs, the company that owns and is the primary developer of the Flow blockchain, is being sued collectively. I won't go into the details, they're all in our report. The claim is that the NBA Top Shot collection failed the Howey test. Neither I nor my colleague are experts on American law. But judging by the Civil Case Management Plan, the case will go all the way through 2023 and 2024. So starting in 2024, we need to keep a close eye on this case. And if it's not in Flow's favor, we need to reduce our position on the token. If the court decision is bad for Dapper Labs, the token will fall in value. If the situation is not critical, FLOW can be bought back cheaper. And this point is NOT financial advice. DYOR.
The topic of NFT turned out to be interesting and we proceeded to explore another blockchain specializing in non-interchangeable tokens, Immutable. But about that next time.
#FLOW
1. Anyone who closely follows the development of web3 knows that NFT is a very powerful and promising technology. Already now non-interchangeable tokens are selling for hundreds of millions of dollars. There are collections that have already generated a billion dollars in sales. This is the NBA Top Shot, released on the same Flow. So everyone who wants to earn on cryptocurrencies, we advise to look more closely to the market NFT. Feel free to consider this as financial advice, I fully believe in it.
2. The second fact will be useful for those who hold FLOW tokens. Keep in mind that Dapper Labs, the company that owns and is the primary developer of the Flow blockchain, is being sued collectively. I won't go into the details, they're all in our report. The claim is that the NBA Top Shot collection failed the Howey test. Neither I nor my colleague are experts on American law. But judging by the Civil Case Management Plan, the case will go all the way through 2023 and 2024. So starting in 2024, we need to keep a close eye on this case. And if it's not in Flow's favor, we need to reduce our position on the token. If the court decision is bad for Dapper Labs, the token will fall in value. If the situation is not critical, FLOW can be bought back cheaper. And this point is NOT financial advice. DYOR.
The topic of NFT turned out to be interesting and we proceeded to explore another blockchain specializing in non-interchangeable tokens, Immutable. But about that next time.
#FLOW
You will be interested to know the story behind one of our investigations. A cryptocurrency company positions its native token as a global reserve currency. We put forward and substantiate the hypothesis that the project is most likely a scam.
https://medium.com/@vlt9/what-is-cypherium-cph-a-failed-project-or-a-future-gem-39bd42ac9b01
#CPH
https://medium.com/@vlt9/what-is-cypherium-cph-a-failed-project-or-a-future-gem-39bd42ac9b01
#CPH
Medium
What is Cypherium (CPH) — a failed project or a future gem?
Cypherium, a New York-based blockchain company, is a Level 1 blockchain developer. It specializes in instant payments, blockchain…
I recently did a report on an interesting topic. You may have heard an expression like "tracking crypto whales wallet". I learned what it means and how we can use it to make money. I learned the theory and put it into practice. I got promising results in my research. And I want to share the knowledge I have with you.
We can think of blockchain as a financial system. Finance is the aggregate of all assets that reside on the web3. Finance matters not only as money, but also as financial flows. These flows have different volumes because they are created by entities with different capitalizations. Some flows are so significant and can affect the entire market or the price of a particular asset. There is such a concept as "crypto whale wallet tracking". It means that knowing about the direction of financial flows can help you make money. Now we will try to learn more about it both in theory and in practice.
We need to define some of the terms that are used in this research.
Whale
A whale is a person or organization that owns at least 10% of a particular cryptocurrency, or a person with more than $10 million in a particular cryptocurrency. This scale is relative and may differ for different cryptocurrencies. This category includes investors who, in addition to significant resources, have extensive experience and knowledge of the market. Whales are assumed to have or may have "insider knowledge," so their actions often serve as a signal to the crypto community. Though as history shows, even the smartest and most experienced of them can make mistakes.
Whale
A whale is a person or organization that owns at least 10% of a particular cryptocurrency, or a person with more than $10 million in a particular cryptocurrency. This scale is relative and may differ for different cryptocurrencies. This category includes investors who, in addition to significant resources, have extensive experience and knowledge of the market. Whales are assumed to have or may have "insider knowledge," so their actions often serve as a signal to the crypto community. Though as history shows, even the smartest and most experienced of them can make mistakes.
Entity
In articles about DeFi, you will often see the term "entity". Blockchain is based on pseudo-anonymity - this is when instead of a person's name or the name of an organization, we only see the address on the blockchain. An address can be owned by one person, several people (multisig wallet), or an organization. For ease of understanding, such an abstract address is sometimes referred to as an "entity".
In articles about DeFi, you will often see the term "entity". Blockchain is based on pseudo-anonymity - this is when instead of a person's name or the name of an organization, we only see the address on the blockchain. An address can be owned by one person, several people (multisig wallet), or an organization. For ease of understanding, such an abstract address is sometimes referred to as an "entity".
Target/target address
Logic dictates that in order to profit by copying the actions of other entities, you need to find those who are profiting.
The point isn't really to keep an eye on an address with a large balance. In fact, the point is not to follow an address with a large balance. It's about finding addresses that make a regular profit. If an address operates not in millions, but in much smaller volumes, and in the long term consistently earns profits of tens or hundreds of percent per annum, why not analyze its strategy?
A whale doesn't necessarily operate on one large balance, he can break it down into smaller ones. There is another argument in favor of tracking successful, but not the largest addresses. The less money an investor has, the more inclined he is to be aggressive in the market. It's not an axiom, but it happens often. If a whale that has ten million dollars gets a profit margin of 10% per annum, that's $1 million. And a wallet owner with $100,000 dollars has to get 100% annualized to make a hundred thousand dollars. Or, in other words, when copying the actions of an address, in addition to other factors, you need to consider the degree of its aggressiveness in the market.
For clarity of understanding, we will use two definitions. We will continue to call addresses with large balances "whales" and addresses that are tracked will be called "target" or "target addresses".
Logic dictates that in order to profit by copying the actions of other entities, you need to find those who are profiting.
The point isn't really to keep an eye on an address with a large balance. In fact, the point is not to follow an address with a large balance. It's about finding addresses that make a regular profit. If an address operates not in millions, but in much smaller volumes, and in the long term consistently earns profits of tens or hundreds of percent per annum, why not analyze its strategy?
A whale doesn't necessarily operate on one large balance, he can break it down into smaller ones. There is another argument in favor of tracking successful, but not the largest addresses. The less money an investor has, the more inclined he is to be aggressive in the market. It's not an axiom, but it happens often. If a whale that has ten million dollars gets a profit margin of 10% per annum, that's $1 million. And a wallet owner with $100,000 dollars has to get 100% annualized to make a hundred thousand dollars. Or, in other words, when copying the actions of an address, in addition to other factors, you need to consider the degree of its aggressiveness in the market.
For clarity of understanding, we will use two definitions. We will continue to call addresses with large balances "whales" and addresses that are tracked will be called "target" or "target addresses".
Investor
In the context of this research, this term will be understood as any entity that operates in the crypto market, be it an intraday trader or a long-term investor. Although they are in fact different types of market participants. We are exclusively interested in successful deals of target addresses.
In the context of this research, this term will be understood as any entity that operates in the crypto market, be it an intraday trader or a long-term investor. Although they are in fact different types of market participants. We are exclusively interested in successful deals of target addresses.
Blockchain is one of the most transparent systems in the world, where any address or transaction can be tracked.
So in the process of finding a worthy target, there is the problem of an overabundance of data among which we need to pick out the useful ones. Where can you find wallet addresses?
Explorers
These are services implemented as a website, displaying various data related to the native blockchain. Explorers scan the blockchain and display developer-specified data. Most often it is online data about blocks, transactions and addresses. Analytical and statistical information may also be provided. One of the best known is the Ethereum explorer. Manually searching in Explorer is a time-consuming task, as depending on the popularity and activity of the blockchain, a huge amount of information can be accumulated there. For example, according to the Bloxy, there are about 2,500 ERC-20 tokens on Ethereum. Therefore, explorers are more suitable for checking already found data.
So in the process of finding a worthy target, there is the problem of an overabundance of data among which we need to pick out the useful ones. Where can you find wallet addresses?
Explorers
These are services implemented as a website, displaying various data related to the native blockchain. Explorers scan the blockchain and display developer-specified data. Most often it is online data about blocks, transactions and addresses. Analytical and statistical information may also be provided. One of the best known is the Ethereum explorer. Manually searching in Explorer is a time-consuming task, as depending on the popularity and activity of the blockchain, a huge amount of information can be accumulated there. For example, according to the Bloxy, there are about 2,500 ERC-20 tokens on Ethereum. Therefore, explorers are more suitable for checking already found data.
Social networks
A place to find wallet addresses of the right targets. Not all investors keep their anonymity, many have public social network accounts. Twitter and Discord are two of the most popular platforms in the crypto community. Such information can be found on personal blogs or any other platforms that the target uses. Before searching for a wallet address, you need to know the target's ID or username on a particular social network.
A place to find wallet addresses of the right targets. Not all investors keep their anonymity, many have public social network accounts. Twitter and Discord are two of the most popular platforms in the crypto community. Such information can be found on personal blogs or any other platforms that the target uses. Before searching for a wallet address, you need to know the target's ID or username on a particular social network.
Specialized services
Today, there are a huge number of services that provide a wide variety of blockchain information. By and large, they do the same job as explorers - scanning a blockchain and getting data out of it. But there is an important difference, explorer is a service that scans only one blockchain, providing the most general information and analytics. Platforms other than explorers can vary widely. They provide data in a more convenient form, allow you to track your own wallet balances, can be like a social network, allowing you to publish posts and communicate with other users. Analytical services are very useful. They generate information from the received data - all kinds of coefficients, indicators, graphs, analytical reports. Data is collected most often from many blockchains.
Today, there are a huge number of services that provide a wide variety of blockchain information. By and large, they do the same job as explorers - scanning a blockchain and getting data out of it. But there is an important difference, explorer is a service that scans only one blockchain, providing the most general information and analytics. Platforms other than explorers can vary widely. They provide data in a more convenient form, allow you to track your own wallet balances, can be like a social network, allowing you to publish posts and communicate with other users. Analytical services are very useful. They generate information from the received data - all kinds of coefficients, indicators, graphs, analytical reports. Data is collected most often from many blockchains.
Which services can be used?
Basically we only need an address and its transaction history. Services that can help you find a worthy target for further research are plentiful. They may not only be in the form of websites, but also as Telegram bots. The choice may also depend on how convenient a particular service seems to the researcher. Here are some examples.
Basically we only need an address and its transaction history. Services that can help you find a worthy target for further research are plentiful. They may not only be in the form of websites, but also as Telegram bots. The choice may also depend on how convenient a particular service seems to the researcher. Here are some examples.
Whale Alert
This is the most famous Telegram bot that publishes real-time information about large transactions. Under each post you can find out useful and not so useful information from commenters.
Arkham
This is a platform that has been mentioned more than once in my researches. It specializes in tracking information from different blockchains, the list of which is regularly updated. One of its useful options is a good visualizer of links between wallets. Another interesting feature is that users can name addresses. And these names can be seen by other users. Thus, you can use this service to find out more information about a target address if it has been given a name.
This is the most famous Telegram bot that publishes real-time information about large transactions. Under each post you can find out useful and not so useful information from commenters.
Arkham
This is a platform that has been mentioned more than once in my researches. It specializes in tracking information from different blockchains, the list of which is regularly updated. One of its useful options is a good visualizer of links between wallets. Another interesting feature is that users can name addresses. And these names can be seen by other users. Thus, you can use this service to find out more information about a target address if it has been given a name.
Debank
This service started as a portfolio tracker, now it has become a platform providing a wide range of services. Here you can track balances and transactions of any wallet in all popular blockchains, the list of which is constantly updated. If assets are locked in staking or lending, this will also be displayed. This way, you can keep track of where the target is earning passive income. Debank has become like a social network in that you can publish posts and attract followers.
To understand its scale, you need to know that the platform tracks 15 addresses with a balance of more than $1 billion. Like many other popular services, Debank provides a number of features on a paid basis. There is a section on the website called “Whales”. Here are the addresses in decreasing order of balance. From here, you can also start looking for a target.
This service started as a portfolio tracker, now it has become a platform providing a wide range of services. Here you can track balances and transactions of any wallet in all popular blockchains, the list of which is constantly updated. If assets are locked in staking or lending, this will also be displayed. This way, you can keep track of where the target is earning passive income. Debank has become like a social network in that you can publish posts and attract followers.
To understand its scale, you need to know that the platform tracks 15 addresses with a balance of more than $1 billion. Like many other popular services, Debank provides a number of features on a paid basis. There is a section on the website called “Whales”. Here are the addresses in decreasing order of balance. From here, you can also start looking for a target.
DeBank
DeBank | Your go-to portfolio tracker for Ethereum and EVM
Patterns
It would be logical to assume that owners of target addresses perform transactions according to a certain strategy, i.e. they pursue some goal. Next I will give examples of some of the patterns and how they can be interpreted. You must remember that these patterns are hypothetical and probabilistic. For accurate interpretation, you need to know the strategy and intent of the target for each specific transaction. There is also the possibility that the target is trying to confuse the market. This is most true for addresses with very large balances or shares of tokens, as these are the ones the market pays the most attention to.
It would be logical to assume that owners of target addresses perform transactions according to a certain strategy, i.e. they pursue some goal. Next I will give examples of some of the patterns and how they can be interpreted. You must remember that these patterns are hypothetical and probabilistic. For accurate interpretation, you need to know the strategy and intent of the target for each specific transaction. There is also the possibility that the target is trying to confuse the market. This is most true for addresses with very large balances or shares of tokens, as these are the ones the market pays the most attention to.
•If the entity has transferred cryptocurrency from personal wallets to exchanges, it is possible that it intends to sell it.
•When a target transfers cryptocurrency from an exchange to a personal wallet, it usually points to long-term holding.
•When an entity transfers stablecoins from a personal wallet to an exchange, it may indicate a desire to buy cryptocurrency and a potential uptrend in the market.
•And, on the other way around, if it withdraws stablecoins from an exchange, it could indicate hedging and a potential down trend.
•When a whale moves assets between exchanges, it's probably because it wants to make an arbitrage deal.
•On the other hand, when a whale moves cryptocurrency between wallets, the purpose of these transactions is difficult to understand. These may be OTC (over-the-counter) trades or they may have other reasons that are not clear.
•When a target transfers cryptocurrency from an exchange to a personal wallet, it usually points to long-term holding.
•When an entity transfers stablecoins from a personal wallet to an exchange, it may indicate a desire to buy cryptocurrency and a potential uptrend in the market.
•And, on the other way around, if it withdraws stablecoins from an exchange, it could indicate hedging and a potential down trend.
•When a whale moves assets between exchanges, it's probably because it wants to make an arbitrage deal.
•On the other hand, when a whale moves cryptocurrency between wallets, the purpose of these transactions is difficult to understand. These may be OTC (over-the-counter) trades or they may have other reasons that are not clear.
Strategies for finding a target
Despite the fact that there are many services for address tracking, all of them provide huge amounts of information in which it is difficult to find the information of interest in the context of this research. Therefore, we need a search strategy that provides direction and makes it easier to find a target.
Each researcher has to find his own strategy, we will try to generate a few of them to put into practice.
Despite the fact that there are many services for address tracking, all of them provide huge amounts of information in which it is difficult to find the information of interest in the context of this research. Therefore, we need a search strategy that provides direction and makes it easier to find a target.
Each researcher has to find his own strategy, we will try to generate a few of them to put into practice.
1. The most obvious way is to find an address whose balance has been steadily increasing and investigate the transactions after which the balance increase occurred. We need to pay attention to buying and selling equal amounts of a particular token. A target can buy a token in more than one transaction. These transactions may be concentrated in a short time frame or in a short price range. The asset may be sold in several stages rather than in a single transaction. It all depends on the size of the target address balance. If it is a successful but not large investor, he can buy and sell in one transaction. The disadvantage of the strategy is the large amount of manual work involved. Since profits can be withdrawn to other addresses and such transactions need to be defined separately. On the other hand, all processes can be automated with software.
2. The second way is to look for a token that has had a "pump and dump" and has had a price increase of 100% or more. We need to find addresses that bought up the token before the pump and sold it during the price increase. Various shitcoins are often pumped, sometimes with the help of crypto whales. This way we can find those who specialize in such speculations and copy their trades.