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Nansen's Token Paradise: A Look into Trending Tokens
Xin Yi Lim
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Key Takeaways
10 min read
  • Trending tokens on Nansen are derived from internal Nansen data on users’ behaviors related to a certain token. Since price movement of tokens are often affected by sentiments as well, having this off-chain metric can help us better understand the activity on a certain token over time.
  • Looking at the popularity of tokens on Nansen within the last 6 months, most have been found to largely correlate with market narratives. The top trending tokens for the week also largely align with the new narratives that have emerged at the start of the year, signaling that the chart provides a good indication of market sentiment.
  • Generally, profitable tokens in the past 3 months have been ranked on the Nansen popularity dashboard. The top profitable token per week in the last 3 months had an average popularity score of 0.05. Looking across a 1-year timeframe, the benchmark for popularity scores still hovers between 0.04 to 0.06.
  • However, popular tokens are not always profitable. Looking at the average PnL of the Top 20 tokens in the past 3 months, the results show that there is no clear correlation between the average PnL and the popularity score of a token. Despite the narrative-driven nature of price action on most tokens, there are many other factors that affect the profitability of a token.

Introduction

This report will focus on delving into our latest Token Paradise Dashboard to surface 'trending' tokens based on the activity of Nansen users.

The token popularity by week dashboard shows the percentage of ‘interest’ in the Top 20 tokens by week historically, which can be filtered by 3m, 6m and 1y. The top trending tokens weekly are also segmented across different user bases on Nansen which could be used to show early trends or profitable opportunities. A score is calculated based on the clicks a token receives on Nansen dashboards - with the top token’s popularity always set as 100 and the score for the other tokens relative to the number of clicks the top token...