Public blockchains can be accessed and read by anyone but creating meaningful insights from this data is no mean feat. Millions of transactions are re
Public blockchains can be accessed and read by anyone but creating meaningful insights from this data is no mean feat. Millions of transactions are recorded across a variety of chains and layer-2 protocols, creating petabytes of data daily.
Services like Google transformed the early internet, accomplishing a significant engineering task by structuring and curating millions of websites to serve simple user queries. A handful of blockchain analytics platforms are looking to do the same, with Nansen distinguishing itself by processing on-chain data into a growing database of wallet labels.
Cointelegraph visited the Singapore office of the growing firm during Token2049 for a one-on-one with co-founder and CEO Alex Svanevik. Occupying a dedicated space in a co-working environment, the office was a buzz with employees that were in town from the company’s hubs in Lisbon, Miami, London and Bangkok.
Svanevik’s background is rooted in artificial intelligence. Graduating from the University of Edinburgh in 2010, the Norwegian’s dissertation focused on building models based on how children learn mathematics. His first foray into the world of work involved the establishment of a business-focused AI consultancy before moving into management consulting.
A stint as a data scientist for a media company preceded his eventual move into the world of cryptocurrencies, as Svanevik was introduced to Ethereum in 2017. His first job for a cryptocurrency firm bankrolled by a $15 million initial coin offering lasted about a year, as the company became one of many to boom and bust post-2017.
Svanevik, Lars Krogvig and Evgeny Medvedev then teamed up to create Nansen AI, eyeing a gap in the market for an on-chain analytics tool aimed at investors:
“On the one hand, you had the free tools that all crypto investors had access to like Coinmarketcap and Etherscan and then on the other extreme, you had very expensive tools that were used exclusively by enterprises like Chainalysis.”
Nansen was formed in late 2019 to provide high-caliber analytics tools to investors delivering blockchain data and insights in real-time. Svanevik admitted that the platform originally attracted sophisticated cryptocurrency traders with large holdings but has since evolved to have a 50/50 split of retail and institutional users:
“We started with what you might call the ‘DeGens’ right before DeFi summer. A lot of them were using Nansen to navigate DeFi summer, which DeFi pools should you allocate your capital to, which tokens should you buy and so on.”
The ongoing cryptocurrency bear market, which is mirrored by traditional stock markets, leads Svanevik to believe that their sector will trend toward greater institutional use over the next two years. Individual investors may take a break from crypto and cut back on analytics services, but continued institutional investment efforts will demand data-driven insights:
“There’s a lot of companies, funds, operators, blockchain and crypto projects where the businesses that raise money are doing fine from a financial perspective. They’re not just going to wind down their operations because crypto tanks 70% you know, they still need to have really high quality analytics and information.”
Labeling wallets
Nansen has slowly garnered a reputation for its wallet labeling efforts across the cryptocurrency ecosystem. Again, this hardware and labor-intensive endeavor is a testament to the platform’s joint AI and human efforts.
Svanevik estimated that Nansen scans nearly a petabyte of data daily from the variety of chains it keeps tabs on. This also accounts for nearly 20% of the company’s running costs, with Svanevik describing Nansen as “Google Cloud maximalists,” with the computing service their infrastructure platform of choice since inception.
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This speaks to the fact that despite public blockchains being available to all and sundry, there is inherent value in bringing order to data and gleaning valuable information from it. This is where Svanevik drew parallels to the platform and what Google did with the wider internet:
“If you think about Google as a search engine, every website is public, right? But this is a huge engineering task to actually structure, curate and serve up the relevant websites for your query. I think Nansen is somewhat analogous to that. But, we also have proprietary data that we enrich the public data with, which is kind of one of the things we’re known for.”
Nansen has over 130 million addresses that it has labeled with additional information that is directly accessible from blockchains. This allows the average user to find out which addresses are held by notable entities like Binance, Alameda, Celsius and Hodlnaut, as Svanevik highlighted.
When asked if the labeling feature was…
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