introduction
In the cryptocurrency market, data has always been an important tool for people to make trading decisions. How can we clear the fog of data and discover effective data to optimize trading decisions? This is a topic that the market continues to pay attention to. This time, OKX specially planned the Insight Data column, and jointly with industry data platforms such as Rootdata, NanSen, CoinGlass, AICoin, Coingecko and 0x Scope, we started from common user needs and hoped to dig out a more systematic data methodology for market reference and learning.
The following is the seventh issue, which was jointly discussed by the OKX Web3 team and the Rootdata team around topics such as Crossing the information gap and establishing a complete analysis system. I hope it will be helpful to you.
About Rootdata: A leading Web3 asset data platform, RootData is the first to encapsulate on-chain and off-chain data of Web3 assets. Currently, RootData includes more than 12,000 projects, 10,000 people, 7,500 investment and financing transactions, and tens of thousands of physical addresses. It presents data in a visual and structured way through tags, ecosystems, collections and other elements. It is a trusted channel for more than 1.5 million users to query Web3 project information.
About OKX Web3: The team brings together top talents with deep technical background and rich industry experience. Over the years, they have continuously innovated and practiced in the field of Crypto, and continue to focus on user experience and security. At present, the OKX Web3 wallet is the most comprehensive decentralized multi-chain wallet on the market, supporting more than 100 public chains, with built-in wallets, transactions, NFT markets, DeFi, and Discover. Users can view multi-chain tokens, NFTs, and DeFi assets through the App, plug-ins, and web pages.
1. When there is too much market sentiment, how to discover real and effective information?
RootData: When market sentiment is high, it is particularly important to mine real and effective on-chain indicators. Pay attention to changes in the projects transaction volume, track the number of active users, analyze capital flows, observe developer activities, and analyze position distribution. Indicators in these dimensions can help users capture more real information. In addition, although social media is full of noise, its hot topics can also reflect the level of attention a project receives to some extent.
By combining these on-chain indicators, users can have a more comprehensive understanding of the actual status of the project, thereby making more rational trading decisions and controlling risks in a complex market environment. However, the crypto industry is still in its early stages of development, and a large amount of information is monopolized by the top players and cannot be fully released to ordinary users. At the same time, the information structure of the crypto industry is not highly compatible with traditional industries, especially on-chain information, which has a high threshold for viewing and interpreting data. In addition, due to the lack of relevant educational resources, it is difficult for ordinary users to understand and access this information, which exacerbates the phenomenon of information asymmetry.
This is exactly the core problem that RootData is committed to solving. RootData focuses on providing more transparent and easy-to-understand data dimensions and functions to help users overcome information gaps and obtain more first-hand information. We believe that users should focus on the following points to obtain more real and effective information:
First of all, users need to find reliable information channels. Since the information in the Web3 industry is quite messy and the information quality of different channels varies, users need to find channels with higher information quality and higher efficiency to improve the quality of their information input, including encrypted media, data platforms, and communities.
Secondly, users need to develop excellent information judgment capabilities. The indicators for measuring project development are very diverse, some of which are highly relevant, while others are less relevant or have a longer effective period. Users need to focus on the most relevant and timely data from various information indicators to improve the accuracy of decision-making.
Finally, users need to have sufficient patience and perseverance. Since the on-chain data and market data are completely public information, the data processed by most users are basically the same, so users must have sufficient patience to explore the value of information and seize opportunities first.
OKX Web3: On this issue, we suggest that users can start from the following aspects to establish their own information screening system:
First, from the perspective of information sources, it is necessary to ensure the diversity and accuracy of information channels. There are currently a large number of information sources on the market, including public channels such as social media and news media, as well as private channels such as Alpha WeChat groups and Telegram groups. When obtaining information, users need to verify the authenticity and accuracy of the information and constantly update relevant channels to ensure efficient information acquisition.
According to our observation, in general, the rhythm of a project being detonated is usually: English Twitter ➡️ Chinese Alpha Group ➡️ Chinese KOL Twitter, which leads to information asymmetry. In order to solve the language barrier problem of users in information transmission, OKX Web3s mobile browser now supports instant translation and will gradually expand to more languages. The core value of this function is to help users break the information gap caused by language differences, directly obtain first-hand information or data of the project, and thus more efficiently explore opportunities on the chain.
Secondly, in terms of obtaining effective indicators, we recommend that users need to gain insight into a project from a more comprehensive dimension, rather than relying solely on the opinions of a single KOL. For example, changes in on-chain transaction data, interactions between smart money or large investors, changes in the number of on-chain transaction addresses and transaction volume, and project fund flows are all effective indicators that can reflect the true situation of the project.
To facilitate users to obtain these indicators, OKX Web3 provides a practical ranking function. Through this function, users can follow the latest projects and their transactions in real time and extract valuable information from massive information. At present, the ranking function can sort projects according to a variety of key indicators, such as overall locked volume, transaction volume, number of active users, etc. These indicators can objectively reflect the actual situation of the project and help users more accurately assess the potential and risks of the project. Through this data-driven approach, users can avoid being swayed by market sentiment to a certain extent and make more rational decisions. For example, when the transaction volume of a project increases abnormally, users can quickly identify this change through the ranking list and further analyze the reasons behind it, so as to have a more comprehensive understanding of market dynamics.
Finally, it is to continuously improve the accuracy of one’s own judgment. Although new projects continue to emerge on the chain, the judgment framework and logic are relatively stable in many cases. However, we still recommend that users continuously iterate and upgrade their judgment methods to ensure that they are not eliminated by the market.
2. What are the key data for screening high-quality early-stage projects?
RootData: Generally speaking, we recommend that users pay attention to information in five key dimensions:
The first is the background of the investors. The more well-known venture capital institutions endorse the project and the higher the amount of financing, the greater the development potential. From the RootData hot project list, it can be observed that the 20 projects on the list every week have all been early-stage investments by well-known institutions.
The second is team background. If the core team has successful entrepreneurial experience, or has backgrounds in large companies such as Google and Microsoft, or backgrounds in prestigious schools such as Harvard, its development potential is generally greater. However, most projects do not directly disclose team information, which requires users to query on third-party platforms such as RootData or Linkedin. RootDatas X-influence index and follow-up relationships can further help users understand the teams industry influence and relationship network.
The third is track and concept. If the project is in a fast-growing track (AI, modularization), or the concept is very innovative, its development space will be more favored by the market. On the contrary, backward concepts may be at risk of being eliminated. Users can analyze the position and direction of the project in the industry track by studying project white papers, documents or research reports.
The fourth is community enthusiasm. If the project party is willing to interact with the community and invest a lot of resources in marketing, it will greatly increase its influence and recognition in the community. Strong community support can often promote the long-term development of the project. This requires users to invest a lot of time in the projects Discord, Telegram, Twitter and other communities to observe their community atmosphere, activity and loyalty, and then make judgments. The fifth is on-chain data. For projects and tokens that have been launched on the main network, users can view their TVL, number of daily active addresses, number of coin holding addresses and other on-chain indicator data through tools such as DeFillama and Nansen, and observe the development logic and potential of the project from its changing trends.
OKX Web3: Screening high-quality early-stage projects requires comprehensive consideration of information from multiple dimensions. Here are some key data and factors for your reference:
If the users need is to screen short-term high-quality projects, we recommend paying attention to the current market capital flows and industry discussion heat: first, pay attention to the areas and projects where funds flow in, because capital flows are often an important indicator of market heat; second, learn about current hot topics and projects through social media, industry forums and other channels, and use market sentiment to conduct short-term transactions.
If the users philosophy is long-termism, we recommend paying attention to the project financing situation and the background of the investors, because in many cases, the success rate of investment institutions may be only 1%, which is the result of screening. For ordinary people, observing the projects selected by the top institutions is more valuable to a certain extent than listening to random recommendations on Twitter.
In addition, we recommend examining the professional background and past experience of team members, understanding the influence of core members in related fields, evaluating whether the project has unique technical advantages, and whether these technologies can effectively solve existing problems, and paying attention to the projects growth strategy, because many projects of the same type are highly competitive, and project owners need to have unique growth strategies to stand out. For example, a well-designed token distribution mechanism can maximize the attraction of high-quality users. Only by comprehensively considering these dimensions can users more comprehensively evaluate the potential and risks of early-stage projects and make more informed decisions.
3. How to overcome the information gap and establish a complete analysis system?
RootData: Crypto market information is complex and redundant. It is quite difficult to build an effective information acquisition and analysis system. Users need to combine their actual needs and explore a set of process solutions that suit them from information sources, information processing tools to insight output.
At present, most crypto project parties or venture capital institutions will announce important news through Twitter as soon as possible, so Twitter is the preferred information collection platform for crypto users. At the same time, as AI tools are further improved, we recommend that users use AI to collect target project information and extract core information elements from complex information, thereby significantly improving project research efficiency.
Specifically, different types of crypto trading groups should reasonably match the tools they need. For example, crypto users who focus on trading need to be proficient in trading-related indicators and systems. In daily trading, they usually choose K-line charts and trading data platforms as their information acquisition tools, such as Tradingview and Coinglass. The self-selected lists and line drawing functions attached to these platforms can assist traders in analysis.
For users who aim to discover projects, interact with airdrops, and conduct investment research, the core demand is to quickly understand the fundamental information of the project, such as accurate introduction, financing background, team situation, news, etc. In this regard, RootData is a very convenient tool that can help users conduct in-depth project analysis both horizontally and vertically. At present, RootData has collected more than 20,000 crypto projects, institutions, and figures, and supports structured queries such as tags, ecosystems, and compilations, and has been visited and recognized by more than 1.5 million crypto users.
For on-chain Degen players, some aggregated multi-chain tools are needed, including but not limited to on-chain data platforms (such as Arkham, debank), monitoring/trading robots (BananaGun), etc. These players not only need to monitor the situation on the chain in real time, but more importantly, they need to be able to quickly send transactions to the chain in order to achieve profitability. After being proficient in using various tools, users need to conduct in-depth research on the correlation between various indicator data and project potential, especially the need to backtest historical data and fully explore the hidden information and value behind the data, so as to better provide guidance for future investment research, discover potential projects and harvest alpha returns as soon as possible.
In fact, there are various information acquisition and analysis systems for crypto users. With the democratization of AI and the development of aggregated data platforms such as RootData, ordinary users are gaining unprecedented convenience to arm their own analysis systems in order to achieve greater success in the Web3 industry.
OKX Web3: Regarding how to build a complete analysis system, we have the following suggestions for users’ reference:
First, broaden the sources of information and avoid relying on a single channel. Paying attention to multiple reliable information sources can, to a certain extent, obtain comprehensive market data and project dynamics, so as to make a more comprehensive judgment. Secondly, it is a good choice to use technical analysis tools to analyze market trends and project performance. For example, the ranking function provided by the Discover function of OKX Web3 mentioned above supports users to view the latest projects and transactions every day.
In addition, it is also very important to actively participate in community discussions. By interacting with other users, you can also obtain key information such as first-hand market feedback. At the same time, continuous learning of knowledge and skills about cryptocurrency can improve analytical ability.
Of course, establishing a reasonable risk management strategy is the key. It is also very important to formulate a clear trading portfolio and risk control plan, avoid over-investment, effectively reduce risks, and ensure that the trading strategy is robust. Generally speaking, establishing a complete analysis system requires the support of information and data, as well as risk awareness.
Conclusion
The above is the last issue of the Insight Data column launched by OKX, focusing on basic issues such as how to break through information gaps, hoping to provide some reference for users. Crossing the information gap and establishing a complete analysis system is a long-term topic in the market. Users need to constantly update the information database and refine the screening granularity. It cannot be achieved overnight. The content of this issue is only a starting point. I believe that every user can find a path that suits them.
Risk Warning and Disclaimer
This article is for reference only. This article only represents the authors views and does not represent the position of OKX. This article is not intended to provide (i) investment advice or investment recommendations; (ii) an offer or solicitation to buy, sell or hold digital assets; (iii) financial, accounting, legal or tax advice. We do not guarantee the accuracy, completeness or usefulness of such information. Holding digital assets (including stablecoins and NFTs) involves high risks and may fluctuate significantly. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. Please consult your legal/tax/investment professionals for your specific situation. Please be responsible for understanding and complying with local applicable laws and regulations.
