Breaking Down Legacy Markets and Blockchain Analytics
Whalemap brings tools used in legacy markets to the blockchain
In legacy markets, certain individuals or institutions have access to resources that are unavailable to the general public. That’s the nature of the industry. But with the advent of the blockchain, financial data should no longer just be available to a select few. We at Whalemap believe that this data belongs to everyone, not just a handful of large institutions.
A common misconception about centralized exchanges is that they make their revenue based on their commissions when people trade. In fact, this is not the case. Robinhood, the New York Stock Exchange, NASDAQ, and other centralized legacy exchanges can make large amounts of money by selling data about their customers to hedge funds.
The real question is, what data do they sell, and why is it so useful and valuable?
Centralized exchanges have access to a wide range of data, such as if the customer is a retail trader or a hedge fund, the balance of any trader on their exchange, and when they sell or buy.
This data holds a lot of actionable insight and alpha. So much, in fact, that hedge funds buy it to effectively trade legacy stocks, such as Tesla or Apple, and make a living for themselves.
For example, imagine any stock that is openly traded on the markets. For any number of reasons, the price of this stock is starting to go up, and many retail traders are starting to buy-in. These retail traders then use most of their balance, or “go all in,” and buy-in with high leverage. If individuals have no account of risk management or experience in trading, they are at risk of being liquidated.
Now, say that the information about these retail traders gets into the hands of a hedge fund. This hedge fund knows the price they bought in and what leverage they used, giving them an understanding of the type of trader that just bought in. With this information, a hedge fund could use its resources to push the price down and move into a short position. At some point, with enough pressure, a liquidation cascade will begin pushing the price even lower, causing these retail investors to lose money.
With the blockchain, the situation is entirely different: all data is available to everyone. Miners, hedge funds, retail traders, and everyone alike can view transaction data, volume, the amount of the transaction, and other insights about any transaction. The transactions themselves contain information about who is sending the transaction to whom,their respective balances, and when the transaction took place. The data and information on the blockchain is transparent, traceable, and reliable.
Thanks to blockchain technology and its decentralized structure, data that would otherwise be available only to centralized legacy exchanges is actually open source and visible to everyone.
Data Available to the General Public
Even though all of this data is open source, it is still a challenge to analyze and format it in a way that can be used effectively.
This is where Whalemap comes in.
How Whalemap Can Help You Process Data
Whalemap is a blockchain analytics platform that uses data science to deliver real-time actionable trading insights by looking at big market players.
One of our primary goals is to shed light on data and insights that are usually unavailable while keeping it beautiful and simple, such as if a trader is selling at a profit or a loss.
We are building an infrastructure to provide an easy-to-use platform for users to track data on various blockchains, including Solana, Ethereum, and Polygon, and present it in a comprehensive and informative manner. Our custom data pipelines process up to 100,000 transactions per second straight out of each blockchain. To instantly provide our users with the data they need, we pay great attention to our charts’ functionality, customizability, and speed.
One of Whalemap’s key features is being able to see when big market players, oftentimes referred to as whales, move their tokens from cold wallets to exchanges or start to sell their crypto in large quantities. With this information and Whalemap’s analytical tools, traders will have the opportunity to insulate themselves from large selloffs or an inevitable crash if these whales dump their tokens.
Data such as this is invaluable for hedge funds and will now be a tool for retail investors.
With Whalemap’s comprehensive data and powerful analytical tools at your fingertips, you can trade freely and confidently without the fear that large institutions have more information than you.
Whalemap was built by former physicists and designers with simplicity and utility in mind. Our goal is to bring transparency to the crypto market using fundamental blockchain data that is reliable, precise, fast, and comprehensible.
Whalemap uses blockchain data to derive insight not otherwise available in legacy markets. Are long-term HODLers selling, at what prices are large players accumulating, is the market overheated with greed? All that and more is what Whalemap is for.