Insight Data Issue 07 | OKX Web3 & RootData: Navigating Through the Information Fog to Establish a Systematic Data Methodology

Author: OKX

Abstract

In the cryptocurrency market, data has always been an important tool for making trading decisions. How can we cut through the data fog and uncover effective data to optimize trading decisions? This is a topic of ongoing interest in the market. This time, OKX has specially planned the "Insight Data" column and collaborated with industry data platforms such as RootData, NanSen, CoinGlass, AICoin, Coingecko, and 0xScope to explore more systematic data methodologies based on common user needs, for market reference and learning.

The following is the content of the seventh issue, developed by the OKX Web3 team in collaboration with the RootData team, focusing on topics such as "Crossing the Information Gap and Establishing a Comprehensive Analysis System," hoping to be of help to you.

About RootData: A leading Web3 asset data platform that first encapsulates on-chain and off-chain data of Web3 assets. Currently, RootData includes over 12,000 projects, 10,000 individuals, 7,500 investment and financing cases, and tens of thousands of entity addresses, presenting data in a visual and structured manner through tags, ecosystems, and collections. It is a reliable channel for over 1.5 million users to query Web3 project information.

About OKX Web3: The team brings together top talents with a strong technical background and rich industry experience, continuously innovating and practicing in the Crypto field for many years, with a sustained focus on user experience and security. Currently, the OKX Web3 wallet is one of the most comprehensive decentralized multi-chain wallets on the market, supporting over 100 public chains, with five major sections: wallet, trading, NFT market, DeFi, and Discover. Users can view multi-chain tokens, NFTs, and DeFi assets through the App, plugin, and web.

1. How to Uncover Real and Effective Information When Market Sentiment is Overwhelming?

RootData: When market sentiment is high, it becomes particularly important to mine real and effective on-chain indicators. Monitoring changes in project trading volume, tracking active user numbers, analyzing capital flow, observing developer activity, and analyzing holding distribution are all dimensions that can help users capture more authentic information. Additionally, although social media is filled with a lot of noise, trending topics can also reflect the level of attention a project receives to some extent.

By integrating these on-chain indicators, users can gain a more comprehensive understanding of a project's actual situation, enabling them to make more rational trading decisions and manage risks in a complex market environment. However, the crypto industry is still in its early stages, with a significant amount of information monopolized by leading players, making it difficult for ordinary users to access. 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 barrier to data viewing and interpretation. Coupled with a lack of educational resources, ordinary users find it challenging to understand and access this information, exacerbating the phenomenon of information asymmetry.

This is precisely the core issue that RootData is committed to solving. RootData focuses on providing more transparent and easily understandable data dimensions and functionalities, helping users bridge the information gap and obtain more firsthand information. We believe that users should focus on the following points to obtain more real and effective information:

First, users need to find reliable information channels. Due to the chaotic nature of information in the Web3 industry, with varying quality across different channels, users need to identify higher-quality and more efficient channels to enhance their information input quality, including crypto media, data platforms, and communities.

Second, users need to establish excellent information judgment capabilities. The indicators for measuring project development are very diverse; some indicators have high relevance, while others have low relevance or longer effectiveness cycles. Users need to focus on the most relevant and timely data from various information indicators to improve decision-making accuracy.

Finally, users need to possess sufficient patience and perseverance. Since on-chain data and market data are completely public, the vast majority of data processed by users is essentially the same. Therefore, users must have ample patience to mine the value of information and seize opportunities ahead of others.

OKX Web3: On this issue, we suggest that users can start from the following aspects to establish their information filtering system:

First, from the source perspective, it is essential to ensure the diversity and accuracy of information channels. Currently, there are numerous sources of information in the market, including public channels like social media and news media, as well as private channels like Alpha WeChat groups and Telegram groups. Users should pay attention to verifying the authenticity and accuracy of the information they obtain and continuously update relevant channels to ensure efficient information acquisition.

From our observations, the typical sequence in which projects gain traction is: English Twitter ➡️ Chinese Alpha groups ➡️ Chinese KOL Twitter, which can lead to information gaps. To address the language barrier in information transmission, the OKX Web3 mobile browser now supports instant translation and will gradually expand to more languages. The core value of this feature is to help users break through the information gap caused by language differences and directly access firsthand information or data about projects, thereby more efficiently uncovering on-chain opportunities.

Second, in terms of obtaining effective indicators, we suggest that users need to gain insights into a project from a more comprehensive perspective rather than relying solely on a single KOL's statements. For example, changes in on-chain trading data, interactions of smart money or large holders, the number of on-chain trading addresses and trading volume changes, as well as the capital flow of the project, are all effective indicators that can reflect the project's real situation.

To facilitate users in obtaining these indicators, OKX Web3 provides a practical ranking feature. Through this feature, users can monitor the latest projects and their trading situations in real-time, extracting valuable information from a vast amount of data. Currently, the ranking feature can sort projects based on various key indicators, such as total locked value, trading volume, and active user numbers. These indicators can objectively reflect the actual situation of projects, helping users more accurately assess the potential and risks of projects. Through this data-driven approach, users can avoid being swayed by market sentiment to some extent, enabling them to make more rational decisions. For example, when a project's trading volume increases abnormally, users can quickly identify this change through the ranking and further analyze the underlying reasons, thereby gaining a more comprehensive understanding of market dynamics.

Finally, it is essential to continuously improve the accuracy of one's judgment. Although new projects are constantly emerging on-chain, the frameworks and logic for judgment are relatively stable in many cases. However, we still recommend that users continuously iterate and upgrade their judgment methods to ensure they are not eliminated by the market.

2. What Key Data Should Be Considered When Screening Quality Early-Stage Projects?

RootData: Generally, we recommend that users focus on five key dimensions of information:

The first is the background of the investors. Projects backed by well-known venture capital institutions and those with higher financing amounts typically have greater development potential. From RootData's popular project list, it can be observed that the 20 projects listed each week have invariably received early-stage investments from reputable institutions.

The second is the team background. If the core team has successful entrepreneurial experience or backgrounds from large companies like Google or Microsoft, or prestigious universities like Harvard, their development potential is usually greater. However, most projects do not directly disclose team information, which requires users to search on third-party platforms like RootData or LinkedIn. The X influence index and relationship network on RootData can further help users understand the team's industry influence and connections.

The third is the track and concept. If a project is in a rapidly developing track (AI, modularization) or has a highly innovative concept, its development space will be more favored by the market. Conversely, outdated concepts may face the risk of being eliminated. Users can analyze the project's position and direction in the industry track by studying the project white paper, documentation, or research reports.

The fourth is community engagement. If the project team is willing to interact with the community and invests significant resources in marketing, thereby greatly enhancing its influence and recognition within the community, strong community support can often drive the project's long-term development.

This requires users to invest considerable time in the project's Discord, Telegram, Twitter, etc., to observe the community atmosphere, activity level, and loyalty to make judgments. The fifth is on-chain data. For projects and tokens that have already launched on the mainnet, users can use tools like DeFillama and Nansen to check on-chain indicators such as TVL, daily active addresses, and the number of holding addresses, observing the trend of these changes to understand the project's development logic and potential.

OKX Web3: Screening quality early-stage projects requires a comprehensive consideration of multiple dimensions of information. Here are some key data and factors for reference:

If the user's goal is to screen for short-term quality projects, we recommend focusing on current market capital flows and industry discussion trends. First, pay attention to the fields and projects where capital is flowing in, as capital direction is often an important indicator of market heat. Second, understand current hot topics and projects through social media and industry forums, utilizing market sentiment for short-term trading.

If the user's philosophy is long-termism, we suggest focusing on the project's financing situation and investor background, as often the success rate of investment institutions may only be one percent, which is the result of careful selection. For ordinary individuals, observing projects selected by leading institutions is generally more valuable than listening to random recommendations on Twitter.

Additionally, we recommend examining the professional backgrounds and past experiences of team members to understand the influence of core members in relevant fields; assessing whether the project has unique technological advantages and whether these technologies can effectively solve existing problems; and paying attention to the project's growth strategy, as many similar projects face fierce competition, and the project team needs to have a unique growth strategy to stand out, such as designing a reasonable token distribution mechanism to attract quality users to the maximum extent. Only by comprehensively considering these dimensions can users more thoroughly assess the potential and risks of early-stage projects, leading to wiser decision-making.

3. How to Cross the Information Gap and Establish a Comprehensive Analysis System?

RootData: The information in the crypto market is complex and redundant, making it quite difficult to build an effective information acquisition and analysis system. Users need to combine their actual needs to explore a suitable process from information sources, information processing tools, to insight output.

Currently, the vast majority of crypto project teams or venture capital institutions announce important news via Twitter first, making Twitter the preferred information collection platform for crypto users. At the same time, with the further improvement of AI tools, we recommend that users utilize AI to gather information about target projects, extracting core information elements from the cluttered data, thereby significantly enhancing project research efficiency.

Specifically, different styles of crypto trading groups should reasonably match the tools they need. For example, crypto users focused on trading need to master trading-related indicators and systems, often choosing K-line charts and trading data platforms as their information acquisition tools, such as Tradingview and Coinglass. The features of these platforms, such as watchlists and drawing tools, can assist traders in their analysis.

For users focused on project discovery, airdrop interaction, and investment research, the core need is to quickly understand the project's fundamental information, such as accurate introductions, financing backgrounds, and team situations. News updates, etc. In this regard, RootData is a very convenient tool that can help users conduct in-depth horizontal and vertical project analyses. Currently, RootData has included over 20,000 crypto projects, institutions, and individuals, while supporting structured queries based on tags, ecosystems, and collections, receiving recognition and visits from over 1.5 million crypto users.

For on-chain Degen players, there is a greater need for aggregated multi-chain tools, including but not limited to on-chain data platforms (such as Arkham, Debank), monitoring/trading bots (BananaGun), etc.

These players not only need to monitor on-chain situations in real-time but also need to quickly send trades on-chain to realize profits. After becoming proficient in using various tools, users need to delve into the correlation between various indicator data and project potential, especially needing to backtest historical data to fully mine the hidden information and value behind the data, thereby better guiding future investment research and quickly uncovering potential projects to reap alpha returns.

In fact, the information acquisition and analysis systems of crypto users are diverse. With the democratization of AI and the development of aggregated data platforms like RootData, ordinary users are gaining unprecedented convenient conditions to arm their analysis systems and achieve greater success in the Web3 industry.

OKX Web3: Regarding how to establish a complete analysis system, we have the following suggestions for users:

First, broaden information sources to avoid relying solely on a single channel. Paying attention to multiple reliable information sources can, to some extent, provide comprehensive market data and project dynamics, allowing for more thorough judgments. Second, utilizing technical analysis tools to analyze market trends and project performance is a good choice. For example, the ranking feature provided by OKX Web3's Discover function allows users to view the latest projects and trading situations daily.

Additionally, actively participating in community discussions is also very important. By interacting with other users, one can also obtain firsthand market feedback and other key information. At the same time, continuously learning about cryptocurrency knowledge and skills can enhance analytical capabilities.

Of course, establishing a reasonable risk management strategy is key. Formulating clear trading portfolios and risk control plans, avoiding over-investment, and effectively reducing risks are also crucial to ensuring that trading strategies are robust. In summary, establishing a comprehensive analysis system requires support from information and data, as well as a strong awareness of risk.

Conclusion

The above is the final content of the "Insight Data" column launched by OKX, focusing on fundamental issues such as how to penetrate the information gap, hoping to provide some reference for users. Crossing the information gap and establishing a comprehensive analysis system is a long-standing topic in the market. Users need to continuously update their information database and refine their filtering granularity; it cannot be achieved overnight. This issue's content is merely a starting point, and we believe that every user can find a path that suits them.

Risk Warning and Disclaimer

This article is for reference only. The views expressed in this article are solely those of the author and do not represent the position of OKX. This article does not intend to provide (i) investment advice or recommendations; (ii) offers or solicitations 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 experience significant volatility. 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 regarding your specific circumstances. You are responsible for understanding and complying with applicable local laws and regulations.