Two leading crypto data providers, Nansen and Kaiko, have recently announced a partnership aimed at providing a more comprehensive insight into transactions across both centralized and decentralized exchanges. This collaboration is expected to supply institutions with a more “holistic view” of the cryptocurrency market.
Despite the growing popularity of decentralized exchanges, centralized exchanges still account for the majority of market activity. According to Clara Medalie, Kaiko’s director of research, Ethereum-based decentralized exchanges only make up around 5% of the volume relative to centralized counterparts.
This ongoing dominance of centralized exchanges highlights the importance of having access to data from both types of platforms. By relying solely on decentralized data, investors can miss crucial market information that significantly influences asset prices.
Nansen’s data helps identify token concentration or potentially suspicious activity, while Kaiko tracks price volatility, liquidity risks, and overall market movements. By incorporating both sets of information into their analysis, users gain a clearer understanding of the blockchain ecosystem and market dynamics.
The partnership between Nansen and Kaiko not only allows for a more comprehensive view of the market but also simplifies access to the combined dataset. Nansen CEO Alex Svanevik explains that this collaboration gives Nansen Query users “programmatic access” to both on-chain and market data without needing multiple integrations. Thus, investors and businesses can make more informed decisions and better value their portfolios.
This collaboration has the potential to significantly benefit the institutions that rely on these data providers. Access to a more comprehensive dataset may lead to more accurate portfolio valuations and better investment decisions. Additionally, the ease of integration provided by the partnership allows users to save on time and resources, creating a more efficient process.
However, the dominance of centralized exchanges raises concerns about their influence over the entire market. The partnership between Nansen and Kaiko may fuel even greater reliance on centralized exchanges, thereby increasing the influence of these institutions over cryptocurrency markets.
In conclusion, while the partnership between Nansen and Kaiko can be seen as a positive step towards providing a more comprehensive view of cryptocurrency markets, it is crucial to monitor the influence of centralized exchanges. As decentralized exchanges continue to gain traction, fostering a healthy balance between the two types of platforms remains essential for the future of the/crypto market and blockchain technology.
Source: Blockworks
