Nansen Analysis | After token unlocks, which venture capital institution moves the fastest?

Viewing "VC Sell-offs" as a New Dimension of Project Evaluation

This article summarizes the views of Nansen analyst Andrew T on his personal social media platform, translated and compiled by BlockBeats, and reposted with permission. Original article can be found here.

The market trend is very poor, but as major funds sell off hundreds of millions of already depressed assets, the situation worsens after early institutional unlocks. Let's look at a recent example and analyze how to protect oneself.

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Last week, the BETA project caught my attention in the "Smart Money inflows" section. This is a lending market project, and I am very optimistic about the young experimental lending product - I believe there is still room for innovation in this vertical, and the Smart Money inflow in the bear market makes it stand out.

As it turns out, the inflow came from unlocked allocations. Checking the large order book, we found that a multi-signature address sent nearly 35 million tokens (worth $4.2 million) to the deployer, and then sent them to a dozen investors whose names match the financing news from 2021.

(Pro tip: Savvy on-chain sleuths should trace through 5 unmarked wallets for distribution to find the unmarked GSR wallet! A thread may be created later in the financing announcement/distribution to mark fund addresses)

Even though BETA's TVL is attracting funds, the price is trending flat, so it's still worth a look. But the question remains, who is holding and who is selling?

Disclaimer: For the purposes of this content, we assume that the VC funds sent to Binance will be immediately sold.

First, let's take a look at the position of Spartan Group

They received 6 million tokens on Tuesday, and according to Nansen's new feature at http://Apeboard.Finance, we can see that this is an interesting wallet: despite receiving a large amount of unlocks, they have not been active since April.

Summary: Hats off to them!

Next, Parafi

Within 6 hours of receiving 6 million tokens, they moved to another tagged address and have gradually transferred about 700,000 tokens to several untagged wallets.

Finally, they arrived at the Binance deposit address, presumably for selling;

Summary: Partial selling

Sequoia India

Another iron-handed hodler's wallet that has not moved since October 2021.

Summary: Hodlers

Delphi Digital

They have not sold this month's 2.5 million unlocked tokens yet, but they did sell the unlocked tokens from December and March last month, which were transferred to an untagged wallet before being sent to Binance.

Summary: Selling in batches.

Multicoin

Similar to Delphi, they have not transferred a portion of the unlocked tokens in May to the trading platform yet, but the unlocked tokens from December last year and March this year were sold on Binance within a few days.

Summary: Slow selling

Selling Master Defiance

They transferred to Binance for selling within 15 minutes of the latest unlock arriving. And for the March unlock, they only took less than an hour to ship out.

Summary: Selling master

Three Arrows Capital

Although their selling actions are not down to the minute, they also completed the selling within a day.

Summary: Sellers

TL;DR: 5 out of 7 institutions are selling their unlocked tokens, some even trying to outpace each other.

Based on this, I personally decided to temporarily halt in-depth research based on BETA. I will use the unlocked sales as an observation indicator to focus on projects I believe in, such as LDO.

In some ecosystems, the ongoing sell-off is brutal. A great information graphic is provided in Wangarian's tweet. Some projects have a very low circulation rate.

This means there will be more unlocked sales, and the expected price may further decline.

Even more incredible is that some sellers openly admit their selling behavior. Some zombie projects may be hotspots for selling.

However, you can protect yourself.

Last month, a Nansen user successfully avoided losses of millions of dollars by monitoring UST transfers on Curve using the "Smart Alerts" feature.

You can also set up Smart Alerts to monitor token movements from deployer addresses.

I will pay more attention to selling behavior, especially for high FDV, low unlock rate ecosystems.