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, the original author: Crypto FI, compiled by Odaily translator Katie Ku.

We sat down with @Daryllautk and @Darrenlautf and @nansen_ai to discuss a strategy for finding Alpha.

I'll try to cover the most important points, so let's get started.

1. Strategy

First, you need to understand "smart money".

The smart money is usually the money that belongs to the whales, the money that brings in the most profits.

2. Using Nansen

Most of us are familiar with the Etherscan browser.

However, it does not allow us to aggregate data and track money inflows.

Here I highly recommend using Nansen.

3. Open Nansen to start the first step

Get into the coins the smart money is buying and research coins you haven't seen before.

4. Leverage historical data

Find these tokens in Nansen's Token God Mode.

Sort by volume and scroll through the past days/weeks for tokens.

This way you don't have to look at small transactions.

5. "Whaling" begins

You should be able to easily identify some "smart money" wallets like Binance/Sequoia

Some of these famous wallets are easy to catch, while others are more mysterious.

Your job is to "human flesh" these unknown wallets as much as possible.

6. Etherscan Browser

If a transaction catches your interest, open it in Etherscan.

There are certain ways to see if a token is a private sale token.

For example, if it is deployed from Deployer, then it is a private sale token.

This is where things start to get interesting.

7. External research

Now you own your token, say $LOKA.

Start searching for fundraising announcements/private sales of tokens and you can track who is privately investing in seed rounds.

Companies like a16z or Binance might post relevant investment information on Medium/accessible blogs.

8. Hypothesis

If there is no smart contract tag, then you need to make assumptions.

Typically, the larger VCs lead the larger rounds, and they tend to have more money to raise.

As in Binance and DragonFly Capital, it is assumed that Binance owns most of the financing.

9. Identify the whale wallet

Then you can set notifications on Nansen to follow them all the way.

So as soon as they start transferring funds, you will be notified.

If you are going to sell, you can get ahead of them, sell first, or avoid a drop in price.

10. Unknown Wallet

They create new wallets because they don’t want to be cannibalized, they don’t want you to track their on-chain activity.

If you can "human flesh search" them and do your homework, you can reap huge benefits.

Especially when you build your investment strategy around them.

11. The rise of on-chain analytics

This is another reason why on-chain analysis is becoming more and more popular.

If you are investing and want to know the status of the token directly from a reliable source, on-chain analysis can help.

12. Find the wallet

An unidentified wallet was found with a large sum of money involved in the seed round.

By right-clicking on the name to open the wallet analysis tool, you can view their holdings.

You can also check out the top ranked interactive wallets to continue diving down their “rabbit hole”.

For example, they may have participated in multiple investment rounds.

You can use various external sites to identify players and narrow your search considerably.

For example, if Binance invested in 3 seed rounds, the data will show up in the wallet.

Then this could be the Binance wallet.

13. Be curious

If you see a token you haven't seen before, do your research and be curious.

Especially if they are held in whale wallets.

"Smart money" is smart because it tends to know what it's doing.

14. Identify Token

Use Coingecko.

If you don't know what tokens appear in Nansen, chances are Coingecko has the information you need.

15. Summary

Once you believe you've "humanized" the whale, add and configure it on nansen_intern.

If you think this is a Binance whale, use wallet analyzer to name it Binance.

This facilitates future tracking and building a portfolio of "human flesh" whales.

16. Become an on-chain wizard

Check the coin address yourself.

17. Alpha

At first you'll be lost in the holes until you come around the corner and come across the Alpha.

Alphas are everywhere.

The more people know about it, the less it is Alpha.

DYOR (do your own research) and becoming an expert on-chain will go a long way toward helping your investment.

Find out early on the projects your whales are investing in and see if there is a trend behind them.

18. Recommendations

Track vesting schedules.

Know when the vesting period occurs.

If whales are buying, trust your gut and they will eventually sell.

You don't want to wake up to find your portfolio is down 20%.

Remember: spread your risk and keep teaching yourself.

Projects need vesting unlock periods. During this period, they cannot sell shares and cash out options.

This information can often be found in white papers. It's important to write these down.

I personally would not buy within 2 weeks of vesting, even if it is a good underlying project.Remember, the giant whale players will not sell all at once,

They need liquidity to sell, and liquidity will come in the form of your needs.

Otherwise, they risk plummeting prices.

Eventually, the benefits will decline.

Even if you create smart alerts for whales, as well as chart alerts, you don't want to be notified every second of a whale's funds.

But if you want to know where VCs are investing, they're not going to say, "Hey, I just invested $2 million in here."

• Allocate a period of time during the day:

• Created a Whale Wallet Portfolio;

This way, you don't invest too much time in tracking down whale wallets.

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Use recent hackathons/accelerator events, such as the recent $AVAX hackathon.

Find well-performing/competitive projects and run some Nansen analysis on them.

Remember, when you see tokens in your wallet, don't imitate them immediately.

The wealth code is hidden here, but you may need to combine it with fundamental analysis-token economy/technology/team, etc.

VCs tend to have good investments -- especially reputable ones.

But VCs can also make poor choices.