What is Smart Money in Crypto? A Detailed Look into Our Methodology

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In traditional markets, 'Smart Money' refers to institutions and insiders with access to deep market insights that are inaccessible to the average retail investor. Their activities, often obscured, leave retail investors at a disadvantage. However, the advent of blockchain technology has introduced a transformative paradigm for crypto traders by offering unprecedented transparency. Onchain analytics platforms such as Nansen decode, aggregate and enrich onchain data, to allow traders to gain unparalleled insights into Smart Money activity. This helps narrow the gap between Smart Money and the average trader. 

In this article, we will cover what Smart Money in crypto entails and provide insights into our methodology and processes for identifying them

What is Smart Money in Crypto?

Smart Money in crypto consists of two primary categories:

Institutions, Funds, and Influential Whales: In line with traditional market definitions, these entities wield extensive market knowledge and access to exclusive information. Given their substantial token holdings, monitoring their activity is crucial for traders. It enables you to anticipate potential market movements, identify upcoming catalysts, and discover promising tokens for further investigation.

Jump Trading's Onchain Holdings

Top Performing Onchain Participants: The vast range of onchain activities, from straightforward trades to more intricate strategies like yield farming and liquidity provision, has revealed a new category of Smart Money. Through real-time analysis of onchain data, it's possible to pinpoint top performers across various sectors. This broadens the definition of Smart Money to encompass any participant in the top percentile of specific activities, regardless of their size or status. This approach unlocks valuable insights into the strategies of the most successful onchain actors, highlighting the most lucrative opportunities for you to dive into. 

Top Performing Onchain Participant

While these definitions on their own encapsulate elite market players, they don't fully cover the spectrum. Institutional players may not always lead in performance, and their large-scale operations can preclude involvement in nascent or niche opportunities. Moreover, focusing solely on onchain data overlooks the significant volume transacted through centralized exchanges.

Nansen avoids these limitations by recognizing both top-performing onchain entities and established funds with a proven track record as Smart Money. This inclusive approach merges traditional insights with the nuanced, dynamic analysis of onchain activity, offering a comprehensive view of market leadership in the crypto space

How Are 🤓Smart Money Wallets Labelled?

Our primary goal is to identify wallets that are the best at what they do, to surface key insights for our users. To achieve this, we employ two main workflows: 

  • Manual identification: Hands-on approach to selecting wallets based on expert analysis.
  • Automated Identification: Utilizes predefined criteria to systematically identify high-performing wallets. 

Institutions, Funds, and Influential Whales

We label such addresses by integrating both onchain (PnL, ROI, Win-rate, etc) and offchain activities (portfolio companies, reported ROI, etc). Monitoring media announcements, analyzing transaction partners, and identifying activity patterns allow us to pinpoint the wallet addresses of institutions, funds, and influential whales. However, not all entities under this category are ‘smart’. Given that the activities of these market participants often occur offchain, relying solely on their onchain performance to gauge 'smartness' is insufficient. In a manner akin to how we identify their wallet addresses, we combine onchain and offchain data points—such as onchain performance, publicly reported earnings, and investments into high-quality portfolio companies—to qualify them as Smart Money.

Top Performing Onchain Participants

Initially, we define and categorize onchain activities that are of interest to market participants, such as DEX trading and yield farming. We then analyze activity across all wallets, automatically labeling the top-performing wallet addresses in each category based on predefined parameters.

It's observed that most market participants typically focus on one or two types of onchain activities. By segmenting addresses and ranking them within these specific categories, we provide users with a clearer view of the strategies employed by the best performers. This segmentation also enables users to focus on the addresses that are most relevant to their interests, eliminating the need to decipher the underlying activities of each wallet address. For instance, if you're primarily a DEX trader with little interest in airdrop farming, you can concentrate on the addresses excelling in DEX trading, thereby streamlining your research and analysis

Explanation of Specific Smart Money Categories

In the following section, we'll delve deeper into some of the most popular onchain participants Smart Money labels. For readers that want a quick overview of all of our labels, 

Smart DEX Traders

The Smart DEX Trader labels recognize wallets that are the top performers among DEX traders across various timeframes. There are currently five categories of Smart DEX Traders:

  • Smart DEX Trader (All Time)
  • 7D Smart DEX Trader
  • 30D Smart DEX Trader
  • 90D Smart DEX Trader
  • 180D Smart DEX Trader

Wallets that achieve a minimum of $1.5 million in cumulative realized profits are awarded the Smart DEX Trader (All Time) label. This benchmark was set to represent the top 0.1% of all wallets at the time of the label's establishment.

For shorter timeframes, our methodology incorporates additional factors to accommodate the volatility of short-term performance. We assess the following criteria:

  • Realised Profit and loss (PnL)
  • Return on investment (ROI)
  • Win-rate
  • Number of tokens traded

Wallets are ranked based on these metrics, and the top percentile is accordingly labeled. An extremely small percentage of wallets (<0.01%) receive a single Smart DEX Trader label, and even fewer earn the label across multiple timeframes. For active traders, Smart DEX Traders are the wallets to focus on and monitor. Analyzing their trades offers insights into potential entries and exits of tokens that they’re trading, helping you make more informed decisions in your own trading journey. 

A Smart DEX Trader’s Profile

The profile above is an example of a wallet that is a Smart DEX Trader across multiple timeframes. The trader started accumulating AI tokens in November 2023, with initial entries into FET at $0.38 and AGIX at $0.24. The address has fully exited both positions after a 3-5x increase in price and a total profit of $2.5M. On top of that, their initial entry into FTM at $0.31 is now up 2.5x.

Airdrop Pro

The Airdrop Pro label identifies wallet addresses that have received a significant dollar value from multiple airdrops. This list is continuously growing as the number of airdrops increases and more wallets meet the criteria we have set.

  • A minimum of $700k in value received across at least 2 unique airdrops
  • A minimum of $50k in value received across at least 7 unique airdrops

The profile below is one of the most successful wallets we’ve identified, receiving over $23.5M in airdrops. 

An Airdrop Pro’s Profile

Airdrop farming has proven to be a consistently profitable endeavor. Although there are countless protocols without a token, the average investor has limited time and resources to dedicate to airdrop farming. By monitoring the activity of Airdrop Pro wallet addresses, you can identify overlaps in farming activities. Protocols that have interactions with multiple Airdrop Pro addresses are likely to be high-value. This approach helps you streamline your research process and focus your efforts on higher-quality protocols. 

First Mover Labels

The First Mover Labels highlight addresses that are frequently among the first 100 to interact with multiple legitimate liquidity or staking pools. Yields are typically highest at the outset and diminish significantly as more capital is introduced. Being early not only allows you to maximize your yield but also enables the most efficient use of your capital. 

We have two First Mover Smart Money labels:

  • First Mover Liquidity Provider (LP)
  • First Mover Staking
A First Mover Staking Profile

Addresses are ranked based on the timing of their interactions with legitimate staking or liquidity pool contracts. Those frequently among the earliest to engage with these opportunities receive the appropriate label. This list of addresses is dynamic, with additions and removals reflecting changes in their ranking over time.

In crypto, being an early participant is crucial—it can mean the difference between a 10x and a 100x return. Like airdrop farming, numerous staking and liquidity pools emerge daily. Given our limited time and resources, identifying the pools these addresses interact with can significantly reduce the effort needed to find and select the best opportunities. However, being early carries higher risk, underscoring the importance of conducting thorough due diligence before committing capital.

Leverage Transparency to Win

The unparalleled transparency of the crypto ecosystem empowers us to identify, analyze, and monitor the activities of Smart Money. For traders who leverage these insights, the advantages are clear: the ability to identify opportunities early, strategically time exits, effectively manage risk, and swiftly adapt to market shifts. This not only narrows the gap between elite market participants and the average investor but also democratizes access to profitable strategies and market foresight. 

By understanding and tracking Smart Money, you position yourself to make more informed decisions, potentially leading to greater success in your crypto trading endeavors. Embracing these insights paves the way for a more level playing field, where informed decisions drive success rather than mere access to privileged information.

Check out what Smart Money is accumulating today, get started for free now!

General FAQs

Does the number of addresses continually increase?

Fund labels are ever-increasing as we uncover new addresses. However, for onchain market participants, our goal is to maintain the quality of Smart Money and focus on quality over quantity.

Can I blindly copy-trade Smart Money?

We strongly advise against blind copy-trading. It is essential to analyze their activity, understand their strategies, and monitor wallets whose trading patterns align with your preferences. Conducting your due diligence and research on any opportunity is crucial before making decisions. Smart Money should be viewed as an additional data point, not the sole basis for trading decisions.

How do I keep up with everything that they do?

Add wallets to your watch list and set up Smart Alerts. For more details, check out our article on tracking crypto whales!

How do you decide the cut-offs when setting criteria for Smart Money addresses?

In general, we make use of percentiles and create a hard limit from there. For example, when we built Smart Dex Traders, the top 0.1% had profits of ~1.5 million. We then used the number, filtering for wallets with ≥ 1.5 million USD profits.

Why is this wallet smart? It lost money on a trade!

No market participant is infallible, and errors are inevitable. Additionally, Smart Money wallets are activity-specific. A Smart DEX Trader may not excel in airdrop farming, and vice versa. It's crucial to concentrate on wallets that are tagged in the categories relevant to your interests.

How often are the Smart Money labels updated?

Fund labels are permanent and ever increasing. However, the labels for onchain market participants are largely dynamic, with addresses being added or removed as they meet the relevant criteria. We continuously monitor the performance within Smart Money categories and the emergence of new activity patterns. This vigilance allows us to update existing criteria or introduce new labels to accurately represent those wallets.

Smart DEX Trader FAQs

Why is there a need for multiple timeframes?

The crypto space evolves rapidly, with narratives shifting quickly. A trader successful in one season may not perform as well when market conditions change. Highlighting emerging elite traders across shorter timeframes accounts for this dynamic environment.

The wallet has made losing trades/bought into protocols that have rugged. Why are they still smart?

Even the best traders make mistakes; it’s improbable for anyone to maintain a 100% win rate. Despite setbacks, these wallets have proven to be top performers.

Can a wallet have multiple Smart DEX Trader labels?

Yes. The best traders consistently achieve significant returns and adapt to market shifts, qualifying their wallets for multiple Smart DEX Trader labels. Wallets with labels across several timeframes often represent higher alpha and are worth monitoring through Smart Alerts!

Does the list of wallets labeled change over time?

Yes. The list is dynamic, automatically updating to add or remove wallets based on the set criteria.


The authors of this content and members of Nansen may be participating or invested in some of the protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Nansen does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Nansen at any time without notice. Nansen accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.

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