TLDR

• Whale wallets/Smart Money can often dictate price and tracking their on-chain movements can be the difference between being successful on a trade or becoming someone else’s exit liquidity.
• Monitoring Smart Money can provide additional insights and context in real-time to allow for better-informed decision making
• Smart alerts are designed to complement your investment process and should not be blindly followed or overly relied upon
• Smart alerts should preferably be optimized for high signal to noise ratio. They can be grouped into discovery (broader, less time sensitive alerts), defense (for active positions), and high signal (specific wallets to track) to reduce as much noise as possible. Having too many alert notifications will become too overwhelming and result in inaction.
• Smart alerts are not a set and forget process. They should be continuously modified, updated, and retired. Markets are dynamic and constantly changing as should the smart alerts
• Be creative and test out different hypotheses. The smart alert parameters can always be updated and fine tuned. The key is to set them up first and iterate as you go. In order to eliminate the most noise, the top parameters to adjust are min USD value, specifying entities/addresses instead of labels, and utilizing the to: and from: functions for addresses.

Introduction

This report will be going over strategies on how to utilize Nansen’s smart alerts feature to its full potential. In addition to providing users with tips on how to properly set them up, it’ll also curate a list of Defi and NFT-focused smart alerts as a starting point.

Why are whale wallets important?

In order to invest successfully in crypto, understanding who the major players are is very important. Luckily, Nansen is able to curate this information and package it into proprietary labels such as whale wallets/Smart Money and users are able to tap into them. Users can potentially trade in real-time and be well prepared for any massive impact these whales have on the market given the size of the positions they hold. Whale wallets are generally referred to anyone with a sizable amount of crypto assets whether it be hedge-funds, prop trading firms, or private investors. Whale wallets can often dictate price and tracking their on-chain movements will be the difference between either coming up on the trade or becoming someone else’s exit liquidity.

Why are smart alerts necessary?

If tracking whale wallets/Smart Money is important, then smart alerts will be one of the most essential tools for generating alpha. By setting up smart alerts, users can gain real-time insights into any token movements within a wallet such as:

• Abnormal position sizing that might be indicative of access to privy information (potential upcoming catalyst)
• Discovering early and new opportunities (staking contracts, yield farms, new chains, small caps, NFT mints)
• Helps users play defense (get notified when selling or transfer to a CEX occurs)

While the goal is not to simply copy trade, monitoring whale wallets and Smart Money can provide additional insights and context to allow for better-informed decision making.

Things to watch out for

There are a few caveats to pay attention to when following wallets.

First and foremost, not all whales are geniuses nor can they always make profitable trades one after another. Given this, Nansen’s labels constantly update in real-time; thus, a wallet that was considered ‘Smart Money’ last year, may not be considered smart money today. Any attempts to trade exclusively based on the moves of whale wallets can be a recipe for disaster. Smart alerts are designed to be a complement to your investment process and should not be blindly followed or overly relied upon.

Secondly, make sure to consider the sizing of a wallet’s positions relative to their entire portfolio to gauge conviction. While, $1m in XYZ token may be substantial absolute wise, within a $100m wallet is most likely a low conviction play.

Tips and tricks for setting up Smart Alerts

• If you identify a wallet that is active on more than 1 ecosystem, make sure to set up the same alert for each ecosystem they’re on. A quick and easy way is to simply copy the alert and change the ecosystem

• For tracking specific tokens, there isn’t a one size fits all for inputting “Min USD Value”. Given liquidity depths are different for each token, a good starting point is to base the thresholds on CoinGecko’s +- 2% depth for small cap tokens

• Avoid setting “Min USD Value” as whole numbers. For instance, if tracking all ETH >$1m flows, consider inputting $980k to avoid wallets that try to spoof and go under the radar

• When setting up inflows under the advanced section, putting a “-” in front will turn it into an outflow

  

• To reduce noise and only look only at transfers for addresses/contract addresses, put “from:” in front of the address

  

• Alerts can be turned off temporarily without having to get deleted. This is a useful function for smart alerts that may be cyclical like “NFT Minting Alerts”

  

• Specific tokens can be excluded from smart alerts if it becomes too noisy or irrelevant

  
• Smart alerts should preferably be optimized for high signal to noise ratio. Having too many alerts will become too overwhelming and result in inaction
• Smart alerts are not a set and forget process. They should be continuously modified, updated, and retired. Markets are dynamic and constantly changing as should the smart alerts.
• Be creative and test out different hypotheses. The smart alert parameters can always be updated and fine tuned. The key is to set them up first and iterate as you go
• Smart alert filters are combined with “AND” logic. Values within the same filter are combined with “OR” logic. For example, if both the Min USD value and wallet label were inputted, the alert will only fire if it satisfies both requirements. On the other hand, labels within a specific field say two different entities (Alameda and Parafi), any one of them will trigger the alert
• Separating smart alerts and grouping them by time sensitivity will ensure that the alpha is not drowned within all the noise
  • Examples of time-sensitive smart alerts might be Smart Money NFT minters, hot contract with large smart money inflows, etc
• When smart alerts come in, make sure to determine what the specific transaction is first (etherscan) and to then conduct further due diligence by using the relevant dashboards like wallet profiler for token, NFT god mode, etc as necessary
• When uploading multiple addresses into smart alerts, make sure to use this spreadsheet for bulk uploading

Curated List of Smart Alerts

General Smart Alerts

Below is a list of general smart alerts that utilize common Nansen labels. Given that they’re labels and not specific entities or addresses, there will be a lot more noise. The thresholds can of course be adjusted to reflect each individual user’s preference,

A refresher on Nansen labels can be accessed here,

• Funds with >$200k movement alert (Ethereum network)
  • Will be notified of all transactions that are >$200k whether it be buying, selling, transferring or staking. The thresholds can be set higher but there’s a likelihood that any TWAP buys or sells might go under the radar
  • Can reduce the number of alerts by specifying entities instead (e.g Parafi, Alameda, etc)
• Funds with >$200k movement for stables (USDC, USDT, DAI) alert (Ethereum network)
  • Transfers of stablecoins to a CEX might be indicative of buying
  • This alert can potentially catch investments into new projects
• Smart money >$1m into a token in one hour alert (Ethereum network)
  • Smart money might know of potential upcoming catalysts
    • Run wallet profiler for token to look at the wallet’s behavior over time
  • Double-check to make sure token flows are actual buys and not un-staking, removing LP or transferred in
• Smart LP and Smarter LP with >$15k movement alert (Ethereum network)
  • Provides insight into what the top 1% of LPs in terms of profits are doing
• First Mover LP with >$15k movement alert (Ethereum network)
  • Provides insight to what the top 200 addresses that were first movers into farms are doing
• Elite DEX Trader with>$500k movement alert (Ethereum network)
  • Provides insight to what the top 1% of trades on DEX are doing on-chain
• Smart NFT Trader & Sweeper alert (Ethereum network)
  • Provides insight to what the top 100 addresses in realized profits are doing in the NFT market
  • This includes all trading, transfer, and minting transactions
• Smart NFT Hodler alert (Ethereum network)
  • Provides insight to what the top 100 NFT portfolios in unrealized profits are doing in the NFT market
  • This includes all trading, transfer, and minting transactions
  • If a Smart NFT Hodler is buying or selling a particular collection, it may be a signal to conduct further due diligence
• Min 10 Smart Minter minting in 1 hour alert (Ethereum network)
  • Instead of always monitoring the Mint Master dashboard, this alert will automatically notify you when Smart NFT Minters are minting a particular collection
• Min $100k inflow (1D) into a max 3 day old contract alert (Ethereum network)
  • Instead of always monitoring the Hot Contracts dashboard, this alert will automatically notify you when a new contract is receiving over $100k of inflow (1D)
  • Depending on whether it's a bull or bear market, the inflow threshold will need to be adjusted

Curated Smart Alerts

When curating a list of smart alerts, we broke it down into 3 major categories: Funds, Individuals, and NFTs. Within each category are all highly successful firms or individuals in their respective niches.

Below is a curated list of smart alerts using the table above:

• Curated list of funds with >$10k movement alert (Ethereum network)
  • This will alert all fund transactions for tokens >$10k
• Curated list of whales and DeFi power users with >$10k movement alert (Ethereum network)
• Curated list of top NFT wallets alert (Ethereum network)
  • Includes all trading, transfers and minting transactions
• Top 25 Debank ranking with >$10k movement alert (Ethereum network)
  • Debank ranking list
• Top 20 Nansen profit leaderboard alert (Ethereum network)
  • Includes all trading, transfers and minting transactions
  • Nansen NFT Profit Leaderboard
• Top 10 Nansen minting leaderboard (30D) alert (Ethereum network)
  • Includes all trading, transfers and minting transactions
  • Nansen NFT Minting Leaderboard
    • Minting has proven to be quite difficult in the current market conditions as the top 10 wallets have managed to only book between 1.41 ETH- 4.69 ETH in the last 30 days

Nansen has also curated a list of pre-configured smart alerts across different chains in the “Explore Alerts” tab

Key Takeaways

• Smart alerts can be extremely powerful when properly configured as it allows users to discover new opportunities and play defense all in real-time.
• Setting up smart alerts and monitoring Smart Money can provide unique insights into crypto markets and is an essential tool that every serious investor should utilize to its fullest potential.