Data-Driven Investor: Strategies for Crypto Market Intelligence | European Blockchain Convention 9

[Music] 2 1 good stuff so uh yeah great to be here very excited to kick off the panel today so yeah we're focused on uh data driven strategies to get ahead on crypto Market intelligence and I think first of all we can maybe just kick off we've got some obviously great speakers so with here with Amber co-founder of kico and uh yeah also co-founder of nansen with ls so maybe we start with some brief intros and then we can K into some questions great thanks a lot OT nice to be here uh so yeah my name is om uh I'm the CEO of Kao and we are a and we are a market data company uh obviously in crypto we are focusing on the B2B segment and institutions regulators and large mostly regulated corporates uh within the crypto ecosystem um we're about 100 people globally uh headquartered in Paris and uh we're in New York London and Singapore as well all right um yeah I'm Lars from uh nunen a blockchain and analytics platform uh based in Singapore founded in 2020 uh by uh Alex the CEO um evgi and myself um company is named after the Norwegian Explorer fridge of fridge of non who um was an academic um a pioneer of Arctic exploration and we're trying to bring that theme to The Uncharted territories of crypto awesome awesome just to add as a little quote I had no idea the name came from here but Kao is actually the name of a submarine that went uh to another Uncharted Territory which is the Challenger Deep the deepest point in in Earth all right didn't know that there you go maybe a theme in data companies uh yeah myself see CEO and co-founder of ades we're actually a web three marketing and data analytics company and uh yeah I think for the conversation today we really want to focus on the data so how to get the best sources of data how to really manipulate that data to get the best possible insight to really lead for True crypto Market intelligence and I think a good way to start that off is really just deep diving into you know each of your companies and understanding a bit more you know what did they do and maybe a specific Focus from a data perspective all right yeah so uh we specialize in um onchain analytics that means understanding what's going on uh on the Chain itself um so we have um we're able to give our customers a macro view of what's going on and then also the ability to drill down into specific addresses and uh and assets and uh understand sort of the holder base and and different metrics that might be of interest um for those uh assets and we specialize in uh uh labeling we analyze the addresses um to build um we give them labels we attribute them to exchanges and and other entities um that gives a um a layer of information that you you wouldn't find uh in at other places and we focus more on the financial Market data side of things so we source market data from two different places uh one of them is centralized cryptocurrency exchanges Usual Suspects coinbase and binance Etc um and also from defi applications so we're uh running our also some uh blockchain node in order to extract Financial Market data from dexes mainly and also lending and boring protocols but we're really focused on the actual Market data St such stuff such as for centralized trading venues order books and executed transactions and when it comes to defi protocols liquidity pools and executed transactions too um that's on the market data side of things and then we have two other uh products one of them is indices uh so we uh build uh reference rates Benchmark rates and investable uh index strategies as well as another product called Kao analytics and this is more riskmanagement focused um type of Quant uh data so stuff such as implied volatility surfaces value at risk models um Etc awesome and I think kind of a good example there of How It's Kind of a cross-section of d Direct on chain pricing data and kind of getting different angles as to how you can get to the crypto Market intelligence view I think understanding that you've got kind of like a institutional use cases here and people that are interested from that side but maybe also kind of more from a personal investment standpoint so maybe to dive more into you know specific use cases that you think are really powerful with each of your your products and I guess like specific profiles that you think is kind of most attributable for to uh yeah I can I can talk from the from the market data standpoint uh obviously I think one of the things that was maybe a little bit undervalued in the past uh was all of the liquidity data and not just liquidity in terms of executed trading volume but liquidity in the sense of Market depth and what we call Market depth is uh the structure and the consistency of order books on centralized exchanges or the or the depth and size of liquidity pools on chain and that is extremely important um for for especially risk management considerations right one of the big learnings from last year uh after the whole kind of FTX Shenanigans was really that if you the value of your position is only worth what you can liquidate it for and that uh we tended in the crypto industry it is just an observation I'm not making a you know generalization but there's been a tendency to um look at the value of a portfolio by looking at the number of tokens multiplied by whatever price you could see online and just calculating a net worth of your portfolio and that's very often didn't take into consideration an IL liquidity discounts that is very real uh if you bar the you know top five top 10 highly liquid assets in crypto um you fall very rapidly into a IL liquid territory and uh and and that is important to understand that is Market data essentially that is extremely key to managing risks in crypto um and and so I just want to highlight that we've built really uh liquidity metrics slippage metrics um and and Market depth metrics that we provide to hedge funds asset managers uh or anyone that wants to really measure uh the performance and the riskiness of a position yeah I have um learned that lesson about IL liquidity at trading nfts um not much of a reaction from the crowd so I'm guessing I'm the only one but sure there's quite a few here yeah all right uh anyway um so um the onchain analytics piece comes in um that to um give you another perspective on the the the trends that you see in the market data you can use onchain analytics to um to explain um the underlying drivers some of the market movements like uh you could look at adoption of the protocols uh for to tokens you can um sometimes you will see um foreshadowing events like uh whales depositing large um uh amounts of tokens to an exchange which could indicate that uh they're planning to sell which will bring the market down um and um yeah again you can look at U not just the the the depth of the liquidity but where is the liquidity coming from actually like are these funds market makers or um if it's a very Niche token is it just all from one deployer that can rug it at any time so it gives a another aspect or another dimension uh there just to add on that clearly uh my understanding is one of the you know qualities of onchain analytics is that you can see uh the provence of the liquidity so when you look at the liquidity pool and when you look at where flows come from you can actually create some kind of you know rating of the quality of liquidity and if it's just a little bit uh you know synthetic liquidity provided by market makers it's not the same thing as if you have an organic liquidity coming from actual offer and demand and this is something we cannot observe on centralized exchange data because all we see is orderbook data we don't know where it's coming from whereas with onchain analytics you get a much more fine um understanding of of the flows that you can see yeah and we don't see what's going on on the exchanges so I think together they form a quite holistic view of um of the market Market yeah absolutely and I think it's interesting right particularly in the landscape that we've seen so far over the past year with looking at risks that have happened with things like FTX I think it kind of shows a balance of not only being able to kind of need that institutional view that you can get from uh looking at order the books and being able to understand that slippage Val but also direct onchain data that I think kind of gets into another angle which also looks at areas of things like sentiment areas of things like adoption kind of looking forward at you know the future of what the market might look like and then being able to maybe predict and understand an element of what's going forward so I guess another question would be like uh if you think about other angles that you would look at from an intelligence perspective in data how do you think about kind of a pending uh what you currently offer within your data tool if you were thinking about it from like an investor perspective what else they could be considering um when thinking about how to get ahead of the market I can give a very Layman kind of answer which is all of the alternative data and that goes from everything from Twitter and social media analysis to like a number of you know uh uh kind of GitHub lines of codes that are being pushed and I think there's a lot of uh yeah alternative data that we can look at not my domain of expertise but maybe with nen you have more well me neither uh but I think you should take all of these um inputs into account and and look for um similarities like you could use uh news and Twitter to to uh to contextualize things you see on chain like uh the other day we could see funds move from alamaa and FDX into into binance and we can then contextualize that and uh and guess that it has to do with the liquidation of those funds and and likewise you can use onchain data to sort of contextualize the the sentiment you can look at um things like stable coin allocation for investors like are they taking on more or less risk uh now than them before and and and that gives you a sense of their risk appetite which should correlate to what you're seeing in the market and if they both align then well there's some validation yeah absolutely and I think from an onchain perspective it's really it's interesting when you particularly can kind of look at these flows and where I guess funds are moving and what that means in the market and how it allign the sentiment as well um I think another angle to obviously go on as well is that we've seen uh in recent Times Obviously we've been in a you know it's been a year since FTX like we said and the market is down at the moment but we've also seen some pick up recently and so I think it's quite an interesting discussion to kind of go into where do you see with I mean we don't have crystal balls exactly but where do you see the market going and is there anything interesting you think it's worth looking at in the market to date the gives some good insight and then maybe kind of looking ahead as well at some interesting data points you you can want to go on this one you sto my line I was going to say I don't have a crystal Bowl but but no I think one of the from a data for a from a market data standpoint one of the things clearly to monitor closely is volume I think uh what we've seen when prices stopped crashing earlier this year is people started saying oh you know we're finally over the crisis is starting to stop we're going to see a kind of consolidation now we're reached floor prices Etc I think that's looking at prices is great looking at volume is extremely important it's it's important to highlight that in 2023 uh liquidity on exchanges have been as shallow as ever uh we've seen very very thin liquidity and Market depth and so I think that the as as far as Market data is concerned one of the biggest drivers that are going to prove that things are picking up for the better is a combination of price uh not some kind of crazy price surge but price moving into healthier territories combined with an increase in volume and I think that is what I would say is going to be the key indicator to say okay things are now you know finally picking up yeah um I also don't have a crystal ball with me um it's very hard to predict where where the crypto Market goes and it's uh you have things that pop up all the time that no one could see coming like nfts I don't think that was sort of anticipated uh but I think it's interesting to just uh to just watch it unfold uh I mean we can talk about tokenization uh and gaming and uh things like social F but if you just um keep your eye your finger on the pulse you you look at the macro data you see where the activity is going you see what protocols are being used you will like discover interesting things like uh like the friend Tech wave it wasn't predicted uh but you could definitely see it uh gain a lot of traction very quickly um so I think um yeah uh it's hard to predict but it's very interesting to watch unfold and and I think maybe just to add a bit of uh kind of positivity or touch for the Outlook look at 2024 uh there's a couple of good news in the pipe right so there's obviously the Bitcoin halving and we if you look at prices historically there's always been kind of bull markets starting at or around uh the haling it's like foure cycle and this is happening mid next year so I think that's a positive uh coming out from the industry the second thing is all the ETF news and the regulation finally formed for us that was a big win of this year we're working now extensively with uh leading Regulators in the US and and in Europe and they honestly they really do know what they're talking about and they understand the asset class now better than ever and so I think 2024 hopefully will be a year where things um get uh a little bit out of the toxic territory that we've entered late 2022 and into a more uh regulatory compliant positive virtuous circle for crypto can I add one thing there's um something I haven't haven't really heard uh much talk about here at the conference so far but um account abstraction uh it's coming to ethereum um which has the power to really uh unlock a new wave of uh retail adoption uh getting rid of the seed phrase uh for users which uh could have uh big consequences and something that I'm personally very excited about and interested in seeing how will play out yeah I think yeah absolutely I think on the kind of conversation of I guess where the market will go in adoption I think thinking about the like ETF landscape is really interesting I think in terms of just the pickup that you get with who you can potentially onboard as an investor particularly if there's this kind of easy access or funds obviously we've seen I think over the past couple days an emergence of how prices could evolve from there and uh yeah in terms of user adoption I think no doubt there's going to be waves with account abstraction I think this is also something we even focus on it ases which is how you can actually take onchain data and then think about how to better help with adoption if you can leverage that data to get better targeting and aspects like this which I think again can help with uh price evation and actually I I really like that you mentioned uh um account abstraction I think we should not forget that you know creating Financial products on top of crypto without having a more solid robust actual use cases and user base is dangerous I think that's one of the deviants of 2022 was a a very high financialization of crypto uh to a point where we've almost ripped out Crypt blockchain out of crypto in some way we were trading the asset class without really knowing what the asset class was about and it is about you know contract execution in a decentralized transparent secure fashion it is about then onboarding more retail people on uh ethereum or other blockchains and it is about industrial applications and that will be the underlying driver of then obviously Financial products layered on top of crypto uh but we need the fundamentals to be robust and we need usage and so you're you know thanks for making that point yeah and that's actually when I think it's a very exciting time to be part of the space as well because you know whenever you are in these you know we're in a bare Market at the moment the market is kind of down relatively but actually what that's meant is that we've had people building and we it feels generally across the industry that we're getting to the point now where we have uh the right in infrastructure in place across the different chains with the layer twos and now it gets onto more consumer crypto right how can we actually begin to have these use cases that bring on bigger adoption with the right infrastructure in place great stuff true as well on the on the institutional side like the whole growth of the uh discussions around real world asset tokenization is a bit I would say the institutional parallel to uh you know seamless onboarding uh and account obstruction in some way it's about using the technology and nfts and I don't I'm not nfts as a as a concept right as a non-fungible token something that needs to be uniquely characterized is very powerful I've never bought you know Arch nfts I'm we can talk about that after yeah if if you need some tips I'm not buying your liquid nfts okay yeah one um one thought I thought would be good to to finish on would be obviously we can look not only kind of ahead at the data perspective in the market but actually just how in the future do we think we'll get to the best intelligence and obviously looking ahead at you know tools like yourselves um there's amazing technologies that I know you'll be implementing around kind of AI ML and other areas that could help get the best intelligence going forward so I was interested to get your perspectives on you know broadly uh where do you see the market going in the future to kind of uh get the best intelligence going forward all right I'll very quickly say that um tokenization um of real world assets there seems to be more and more things that go onchain and I think onchain analytics is going to play a very big role in that future so uh I just see it becoming more and more important yep so I uh I agree uh I have to say that I don't believe in a completely decentralized world I do believe that we need centralized uh Market infrastructure providers such as Banks such as custodians that are going to provide balance sheet reputability and most importantly that are going to be held accountable for Stuff uh you know crypto is all about the not your keys not your uh coins thing where everybody's in charge of their own stuff people actually don't like that and like to have somebody to blame so I think we need to keep that however we do need to use blockchain to dis intermediate a lot of the processes bring trust transparency in a world that is uh a little bit archaic from an execution and infrastructure standpoint so I I really do think that the tokenization of stuff is important because it will enable then layering uh technology on top of it in how we execute contracts between parties or a bank and a client great stuff yeah and I think uh I think we're at time so yeah thank you very much