Want to make smarter decisions in Web3? Start tracking on-chain activity.

On-chain data reveals everything happening on a blockchain - from token transfers to user behavior. It’s transparent, real-time, and essential for understanding your project’s health, optimizing tokenomics, and staying competitive. With the blockchain industry projected to hit $163 billion by 2027, mastering on-chain tracking can give you an edge.

Here’s what you’ll learn:

• Why track on-chain activity: Measure user engagement, detect fraud, and evaluate performance.

• Key tools: Use blockchain explorers (like Etherscan) for raw data and analytics platforms (like Nansen) for deeper insights.

• Step-by-step guide: Define goals, pick the right chains, set up dashboards, analyze data, and improve tokenomics.

• Best practices: Avoid common tracking mistakes, stay compliant with regulations, and ensure data accuracy.

Tracking on-chain activity isn’t just about numbers - it’s about making informed decisions to grow your Web3 project.

Every Onchain Signal Explained in 13 Minutes

Main Data Sources for On-Chain Activity

Tracking on-chain activity effectively starts with pinpointing the right sources of data. The blockchain ecosystem offers a variety of platforms, each tailored to specific purposes, forming the backbone of tokenomics strategies.

Blockchain Explorers for Direct Monitoring

Blockchain explorers provide a direct line to blockchain data, offering real-time and historical insights into blocks, transactions, and wallet addresses. Each blockchain typically has its own explorer, while some platforms extend their coverage to multiple networks.

For Ethereum, Etherscan is the go-to tool, offering detailed views of transactions, smart contracts, wallet addresses, and token data. Similarly, Blockchain.com serves as a reliable explorer for Bitcoin, delivering real-time data on transactions, blocks, and wallet activity.

Other popular explorers include:

• BscScan: Focuses on the BNB Chain, providing analytics for BEP-20 tokens and transaction insights.

• TRONSCAN: Offers detailed tracking for TRON, including smart contracts and blockchain statistics.

Here’s a quick reference table for some of the top blockchain explorers:

When selecting a blockchain explorer, it’s important to weigh factors like reliability, reputation within the community, functionality, and multi-network support. For those needing cross-chain analysis, Blockchair is a versatile option, covering cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Ripple.

While explorers provide raw data, analytics platforms take it a step further by turning these metrics into actionable insights.

Analytics Platforms for Data Analysis

Analytics platforms are designed to make sense of blockchain data, offering features like custom dashboards, alerts, and cross-chain aggregation. These tools go beyond basic exploration to deliver deeper insights.

Glassnode is a favorite among institutions, providing over 3,500 on-chain metrics to more than 1 million users. Its focus on Bitcoin and Ethereum network health makes it particularly useful for professional asset managers. The platform offers tiers ranging from free access to advanced professional plans.

Nansen adds another layer by combining on-chain data with wallet labeling, making it ideal for tracking large transactions and institutional activity. For those who prefer a hands-on approach, Dune Analytics allows users to create custom dashboards and visualizations using SQL, making blockchain analysis more accessible. Other notable platforms include CryptoQuant, which focuses on market liquidity and trading patterns, and Santiment, which merges social media data with on-chain metrics to provide additional context.

These analytics tools are invaluable for gaining a deeper understanding of blockchain activity. But for those concerned about security and compliance, specialized platforms are essential.

Tools for Risk and Compliance

Risk and compliance tools are critical for detecting fraud, preventing exploits, and monitoring illicit activities. With global illicit cryptocurrency activity reaching $24.2 billion in 2023, these tools have become indispensable.

Chainalysis is a leader in this field, trusted by 9 of the top 10 cryptocurrency exchanges. Its platform offers continuous monitoring and real-time alerts, helping organizations quickly respond to suspicious activities while staying compliant with regulations. To date, Chainalysis tools have been instrumental in freezing or recovering over $12.6 billion in illicit funds. Additionally, the platform is relied upon by over 45 regulators worldwide to shape policies, protect consumers, and address national security concerns.

"With continuous monitoring and real-time alerts of cryptocurrency transactions on your platform, organizations use KYT to swiftly address suspicious activities, maintaining regulatory compliance and enhancing security." – Chainalysis

Chainalysis also provides training and certification programs, having prepared more than 20,000 professionals to date. Its customizable risk settings and alert management features allow organizations to tailor their fraud detection strategies, ensuring a secure environment for users in the Web3 space.

Tools for Tracking On-Chain Metrics

Choosing the right tools to analyze blockchain data is crucial. These tools help transform raw blockchain information into actionable insights, aligning data analysis with your project's goals. They serve as a bridge between raw data and strategic decision-making, ensuring that your tokenomics and overall project strategies are on point.

Top Tools for Web3 Founders

Here’s a rundown of some of the most effective tools for tracking on-chain metrics:

• Etherscan: A go-to resource for Ethereum projects, offering detailed transaction data and smart contract insights.

• Dune Analytics: Perfect for creating custom dashboards and visualizations, turning complex blockchain data into easy-to-read tables and charts. While it’s a powerful tool, keep in mind that it requires SQL knowledge to unlock its full potential.

• Nansen: This tool processes an impressive 500 TB of data daily and tracks 250 million wallet labels. It’s particularly useful for monitoring whale activity or institutional interest, thanks to its real-time alerts and wallet labeling system.

• DefiLlama: Ideal for DeFi projects, this platform provides insights into Total Value Locked (TVL), yield tracking, and stablecoin activity. It’s a must-have for comparing protocols and analyzing liquidity metrics.

• CoinGecko: With data on over 10,000 crypto assets from 700 exchanges, CoinGecko is invaluable for tracking your token’s market performance. Its companion tool, Gecko Terminal, is especially useful for spotting early liquidity pools and emerging trading trends.

• QuickNode Streams: If you need real-time data from over 69 blockchains, this tool delivers enterprise-grade access. It’s particularly handy for immediate alerts on specific on-chain events or transactions.

• Arkham Intelligence: Using AI, Arkham maps blockchain addresses to real-world identities. This can help you understand user behavior, identify potential partnerships, or flag risks.

When and How to Use These Tools

The timing and purpose of using these tools can greatly impact their effectiveness:

• Real-time monitoring: Tools like QuickNode Streams and Nansen are perfect for active trading periods, token launches, or security monitoring. Setting them up before major events ensures you catch unusual activity as it happens.

• Historical analysis: Dune Analytics and other platforms like Glassnode excel during quarterly reviews or when presenting to investors. They’re great for uncovering long-term trends and evaluating the success of your tokenomics strategy.

• Market intelligence: Tools like CoinGecko and DefiLlama should be part of your daily workflow to keep tabs on your competitive position and spot new opportunities or challenges.

To stay organized, establish a routine: use real-time alerts during critical events, review trends weekly, and dive deep into data monthly.

Using Multiple Tools Together

No single tool covers everything. Combining platforms ensures you get a complete picture of on-chain activity. A three-tiered system works well:

1. Foundational monitoring: Use tools like Etherscan for transaction verification, CoinGecko for market data, and Nansen for wallet tracking. These provide essential daily insights without overwhelming complexity.

2. Analytical deep-dives: Add tools like Dune Analytics for custom reports and DefiLlama for DeFi-specific insights. These help you analyze patterns and trends behind the foundational data.

3. Specialized tracking: Tailor this layer to your project’s unique needs. For instance, NFT-focused projects might track token activity, while DeFi protocols could prioritize liquidity pool analytics.

To streamline operations, define key metrics and consolidate data through API-integrated dashboards. A well-rounded tracking system not only aids in making informed decisions about tokenomics and partnerships but also strengthens the reliability of your insights. By using multiple tools, you can validate findings and move forward with confidence.

Step-by-Step Guide: How to Track On-Chain Activity

With the right tools in hand, here’s how you can create a solid on-chain tracking system.

Step 1: Define Goals and Objectives

Before diving into data, it’s crucial to set clear goals. Taru Jain, a business builder and educator, offers this advice:

"First thing to do when you see data? Close your eyes...Drowning in data has been happening from from mid 1990s when Web1 started. Just because 'digital' started spewing out data, doesn't mean it is all of value. So we religiously try and practice the habit of first closing our eyes and trying to formulate a list of questions the data needs to answer. Therefore you know what goals your data has to help you measure, and therefore it becomes a valuable tool to help make informed decisions in Web3 projects."

Start by asking yourself what you want your tracking system to achieve. Are you aiming to boost user engagement, fine-tune token distribution, or keep an eye on security risks? Your goals will dictate which metrics to prioritize and what tools to use.

Create a list of specific questions. For instance, if you’re launching a DeFi protocol, you might ask: How many unique wallets interact with our smart contracts daily? or What’s the average transaction size, and how does it correlate with token price changes?

Set SMART (Specific, Measurable, Achievable, Relevant, Time-bound) objectives. Instead of saying, “improve user engagement,” try something like, “increase daily active wallet addresses by 25% within three months.” This clarity helps you focus on the right metrics and track progress effectively.

Step 2: Identify Relevant Chains and Protocols

Choosing the right blockchain depends on your project’s goals and audience. Each blockchain ecosystem caters to specific types of users and projects.

• Ethereum is the go-to for DeFi projects due to its established ecosystem and liquidity pools, though its high gas fees and slower transactions can influence user behavior.

• Binance Smart Chain (BSC) offers lower fees and faster transactions, making it ideal for cost-conscious users.

• Polygon addresses Ethereum’s scalability challenges and is popular for NFT projects and Play-to-Earn games, where metrics like NFT trading volume are key.

• Solana attracts speed-focused projects but has a history of network outages, so monitoring its stability is essential.

Think about where your target audience is most active. As one industry expert explains:

"Traditionally, certain segments of the crypto audience concentrate on certain blockchains. For example, Arbitrum (L2 solution for Ethereum) has a lot of DeFi projects, and Solana & Avalanche has a lot of NFT related projects. Before choosing, you should analyze in detail who mainly uses this chain, and choose the most suitable one."

Also, explore grant and accelerator programs offered by specific chains. These can provide not only funding but also access to active communities and resources for building your tracking infrastructure.

Step 3: Set Up Dashboards and Alerts

To make sense of the data, start by setting clear analytical goals. Avoid overwhelming yourself by focusing on metrics that drive actionable insights. Use human-readable labels instead of cryptic identifiers, and highlight trends or anomalies, like sudden spikes or drops, to spot potential issues.

Configure real-time alerts for critical events. For example, track unusual transaction volumes or large token transfers that could signal security concerns. Alerts can also flag when a single wallet accumulates more than 5% of your token supply or when transaction fees spike unexpectedly.

For larger-scale projects, optimize your dashboards by using data partitioning and caching. These steps ensure your system runs smoothly as data volume increases.

Step 4: Export and Analyze Data

Raw data alone isn’t useful - it’s what you do with it that matters. Many tools let you export data via APIs, enabling you to integrate it into your preferred analysis software.

Set up automated daily exports of key metrics like transaction volumes, active wallet counts, and token transfer patterns. This builds a historical dataset for tracking trends and reporting to stakeholders.

Ensure your data pipeline is reliable by implementing version control, testing procedures, and thorough documentation. Clean and normalize data as it comes in, removing duplicates and standardizing formats across sources.

Connect your data insights to business decisions. For example, if you notice a link between social media activity and on-chain engagement, you can schedule marketing campaigns to align with peak activity periods. Start small by focusing on a limited set of metrics, then expand as your team grows more comfortable with the tools.

Step 5: Apply Insights to Tokenomics Strategy

Use the data you’ve gathered to refine your tokenomics and growth strategies. Look for patterns in user behavior to guide token distribution. For example, if frequent, smaller rewards lead to better engagement than one-time payouts, adjust your incentives accordingly.

Monitor token velocity and holding patterns. High velocity might indicate speculative trading, while low velocity could signal a need for more token utility. Use these insights to fine-tune token features or adjust supply mechanisms.

Link on-chain metrics to business outcomes like user retention or revenue. This helps identify which metrics deserve ongoing monitoring and resources. For projects seeking investors or preparing fundraising materials, on-chain data can demonstrate traction and growth. Metrics like consistent user activity, balanced token distribution, or increasing protocol usage provide solid evidence of progress.

For more advanced adjustments, consider consulting experts. Services like Tokenomics.net specialize in helping Web3 projects design and optimize token models using data-driven insights. Whether you’re in gaming, DeFi, or utility tokens, their expertise can help you stress-test your strategies and ensure long-term success.

Best Practices and Common Mistakes

Once you've set up dashboards and data pipelines, it's essential to follow a few key practices to maintain data accuracy and ensure your project thrives. Here are some practical tips to avoid common mistakes in on-chain tracking.

Ensuring Data Accuracy

Double-check critical metrics with multiple sources. Different tools can interpret the same transaction in varying ways, especially when smart contracts are involved. To avoid errors, always verify important metrics using at least two trusted sources before making decisions.

Understand blockchain-specific terminology. Each blockchain has its own set of terms and metrics, which can easily lead to confusion. For example, Ethereum's "gas fees" might be labeled as "transaction fees" on another platform, with entirely different calculation methods.

Don’t jump to conclusions based on a single transaction. Large token movements can spark unnecessary alarm. In many cases, what looks like a major sell-off is just an internal transfer. For instance, in 2024, several projects faced community backlash over what appeared to be token dumps - only to later reveal these were routine wallet reorganizations by exchanges.

Use multiple indicators to label wallet addresses. Avoid relying on just one data point when categorizing wallets. For example, a wallet receiving tokens from an exchange might not belong to a retail investor; it could be tied to another exchange, a market maker, or an institutional service provider.

Regularly update your tracking methods. With new token standards, layer-2 solutions, and DeFi protocols emerging all the time, tracking methods that worked six months ago might now miss key details. Stay adaptable and refine your approach to keep up with these changes.

Adopt a composite approach for clarity. Instead of focusing solely on transaction volume, combine it with metrics like unique wallet counts, average transaction size, and time-based patterns. This gives you a more complete picture of user behavior.

Staying Compliant with U.S. Regulations

The U.S. regulatory landscape for crypto continues to evolve, with agencies showing increased support for domestic crypto markets in 2025. To stay ahead, implement fraud-detection tools early, such as anti-money laundering (AML) and Know-Your-Transaction (KYT) measures. These tools can help identify fraudulent activity while respecting user privacy.

Balance privacy and compliance. As Michael Kunz, Legal Partner at MME, puts it:

"Blockchain technology has the capability to transcend the misleading notion of a binary choice between privacy and compliance. However, these benefits can only be realized if the developers of privacy tools do not fear being held liable for the illegal use of their tools".

Monitor activity from high-risk regions. Be vigilant about users from sanctioned countries or those involved in illegal activities. The 2022 Tornado Cash sanctions, which targeted a mixer used to launder over $7 billion since 2019, highlight the seriousness of these issues.

Prepare for global regulations. Even if your focus is on the U.S., planning for potential international regulations now can save you time and resources later.

Getting Expert Help

Treat security as a core feature. In 2024 alone, Web3 hacks and exploits caused nearly $3 billion in losses, with phishing and social engineering accounting for over $600 million of that. Investing in security early builds trust and shows users that your platform prioritizes their safety.

Don’t neglect any part of your security stack. For example, the $50 million Radiant Capital exploit in 2024 wasn’t due to a smart contract flaw but malware on developers’ computers. Similarly, a 2023 compromise of Ledger's Connect Kit SDK affected multiple dApps when attackers accessed a former developer's npm credentials.

Consult tokenomics experts for complex projects. Eddy Lazzarin, CTO at a16z Crypto, advises:

"A token should be a byproduct of a well-designed protocol, not an end in itself".

For advanced tokenomics, working with experts like those at Tokenomics.net can help ensure your insights translate into meaningful strategies across gaming, DeFi, and utility token projects.

Establish strict coding standards early. Threat modeling exercises, automated testing, and internal reviews can catch potential issues before they escalate. As the industry matures, both investors and users expect strong security practices from day one. Continuously integrating these measures will help maintain the integrity of your on-chain tracking system.

Conclusion: Using On-Chain Data for Web3 Growth

Transforming on-chain data into actionable strategies can be the game-changer for driving growth in Web3. The most thriving projects recognize that these insights are the cornerstone for everything from designing tokenomics to fostering strong communities.

Here’s a breakdown of the key lessons and next steps to help Web3 founders make the most of on-chain data.

Key Takeaways for Web3 Founders

Tokenomics thrives on data. A token’s success hinges on how effectively you track and act on on-chain signals. For example, managing token velocity through staking programs or creating in-platform utilities ensures tokens remain active within your ecosystem instead of being traded away on exchanges.

Community engagement is the backbone. Over 58% of launch initiators highlight community engagement as critical for long-term success, while 16% point to poor communication as a major issue. On-chain data provides a clear picture of your community’s behavior - not just what they say in Discord chats.

Network activity uncovers demand. Monitoring network activity helps validate your roadmap and make timely pivots. It allows you to differentiate between genuine user adoption and speculative trading, empowering you to make smarter decisions.

"The token isn't the finish line. Rather, it's the starting signal. What really matters is how aligned it is with your product, your community, and your long-term vision".

User segmentation fuels growth. Rain demonstrated this by achieving a fourfold return on investment through on-chain user insights. By targeting users who were also active with competitors, they delivered measurable results. This proves that focusing on actual behavior data can unlock untapped opportunities.

Next Steps for On-Chain Tracking

To put these insights into action, here’s how you can start leveraging on-chain data effectively:

Set clear, measurable goals. Whether it’s acquiring a specific number of users or launching an MVP with well-documented metrics, having precise objectives ensures focused efforts and tangible results.

Create a tracking dashboard. Monitor key metrics like circulating supply, vesting schedules, and wallet activity patterns. Use tools like Discord and X to foster discussions while analyzing the impact of your strategies through a unified view of both on-chain and off-chain activities.

Design sustainable tokenomics early on. Clearly define your token’s utility and align supply mechanisms with long-term growth goals rather than short-term gains. Well-thought-out tokenomics align incentives and help achieve your project’s vision.

Seek expert advice for complex strategies. If you’re navigating advanced areas like DeFi, gaming, or utility tokens, consulting specialists like Tokenomics.net can help translate on-chain insights into detailed strategies that support fundraising and investor relations.

As the Web3 space evolves, the projects that thrive will be those that treat on-chain data as the foundation for every decision. Or, as Matrika Tiwari from TDeFi puts it:

"In Web3, success belongs to those who dare to think ahead and execute with precision".

FAQs

What are the main advantages of tracking on-chain activity for a Web3 project?

Tracking on-chain activity offers a clear view into the inner workings of Web3 projects, helping them establish trust by making data openly available to their communities. This level of visibility strengthens the bond between projects and their users, ensuring everyone stays informed.

It also supports quick, informed decisions. Founders can respond rapidly to market shifts or changes in user behavior, keeping their projects aligned with current trends.

Beyond that, monitoring on-chain data helps pinpoint important users and engagement trends, fine-tune strategies to boost user retention, and spot risks or opportunities for growth. By keeping a close eye on this data, projects can maintain ecosystem stability and set themselves up for long-term success.

How do I choose the best blockchain explorer or analytics platform for my Web3 project?

When choosing a blockchain explorer or analytics platform for your Web3 project, it's important to weigh a few essential factors. First, consider the platform's reliability and reputation within the community - these can often signal how well it performs. Features like real-time transaction tracking, multi-blockchain support, and a simple, intuitive interface can make a huge difference in usability.

It's also crucial to ensure the platform offers detailed data that fits seamlessly with your project's blockchain ecosystem. For developers, platforms with developer-centric tools can be especially useful, streamlining workflows and boosting efficiency. Ultimately, pick a platform that's transparent, dependable, and customized to your project's unique requirements.

How can I ensure regulatory compliance when tracking on-chain activity for my Web3 project?

To meet regulatory requirements while monitoring on-chain activity, start by establishing strong KYC (Know Your Customer) and AML (Anti-Money Laundering) protocols. These measures confirm user identities and keep an eye on transactions for any suspicious behavior, helping you stay compliant with legal standards.

Take advantage of blockchain's transparency by keeping detailed and unchangeable audit trails for all on-chain activities. This approach not only ensures compliance but also builds credibility with stakeholders. Incorporating risk-based monitoring systems can further enhance your ability to detect unusual patterns and promptly report them to regulators.

It's also crucial to stay updated on changing regulations in your area. Consulting with professionals can help align your project with the latest compliance practices. By following these steps, you can confidently manage regulatory challenges while supporting a secure and compliant Web3 environment.

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