Santiment's New 'Daily Active Deposit Ratio' Sansheets Model Explores a New Way of Understanding Address Activity
As an encore to our Exchange Inflow/Outflow Sansheets model that we debuted last week and discussed in this write-up, we are now proud to offer a similarly valuable Sansheets model that covers assets' active deposits and address activity.
The idea behind Daily active deposits generally works similar to Exchange Inflow, where the more that are being identified over a given time, the higher the likelihood there is of a big sell-off due to the large amount of tokens moving to exchanges. To be precise, this metric shows the number of unique deposit addresses that have been active on a particular day for a given asset. Read more about the metric on our Academy if you'd like to learn more.
With this in mind, we've put together a model that recognizes when there is an outlier day (or week) of active deposits, by quickly comparing how this metric looks for around 40 different assets against each respective tokens normal resting average of active deposits.
This being said, active deposits can be deceptive to look at because the price of an asset may simply be surging, thus generating more attention than usual from the crypto community. And even though there may be a rise in deposit addresses activating with an asset like $MATIC or $SKL, as we can see from the above chart (with the red being the active deposits above their average, and blue bars being their price % changes over the past 1 and 7 days, respectively), this may just be because there is more overall address activity.
Because of this metric having a potentially misleading quality, we now have an Active Deposits ratio chart on this new Sansheets model that introduces the percentage of active addresses that are Active Deposits vs. the overall amount of Active Addresses (overall address interacting on the network).
By looking at just the previous day vs. the asset's 90-day average of this ratio, we can make some interesting observations. For example, 25.2% of $AELF's daily address activity is related to active deposit addresses in the past 90 days. Compare this to a popular DeFi asset, $COMP, which has just 4.4% of its address activity related to active deposits over the past 90 days.
This is interesting and all, but we want to actually see how it may be effective. At least in theory (and yes, we will plan on back-testing this thoroughly in the future), a more precise way of using Daily Active Deposits effectively in real-time is by looking at how their most recent full day of the Active Deposit ratio looks compared to its 90-day average. If the proportion of active deposits are higher (which can be visualized above through identifying assets where their (1-day) blue bars are higher than the (90-day) red area line, then there is a higher proportion of active deposits compared to overall address activity than usual (a concerning side). On the flipside, if the 1-day blue bars are significantly lower than the 90-day red area line, that means that there is a more relieving sign that the asset is not seeing many tokens moving to exchanges to potentially sell off.
Also available on this Sansheets model is the ability to look at only non-deposit address activity, which simply subtracts active deposits from its overall address activity and shows how much higher (or lower) the total non-deposit address activity is compared to its 90-day mean.
Generally, the higher the non-deposit address activity is, the better.
And just like on our Exchange Inflow/Outflow model we recently made, we have outlier spikes for the top 3 (or top any number you customize it to) over the past 90 days. Use this to quickly identify when the key days were for Active Deposit (to find potential local tops) or Non-Deposit Active Address spikes (to find encouraging usage upticks).
If you're ready to dive in and explore this model, remember that you will need to have a Sanbase PRO API key. You can sign up for Sanbase PRO here to get one.
Once you have your Sanbase PRO account (or if you already do), you'll then want to check out any of the model links below and go to File -> Make a Copy, and simply:
1) Download Sansheets: https://academy.santiment.net/sansheets/setting-up/
2) Plug in your API: https://academy.santiment.net/sansheets/adding-an-api-key/-----
3) If you're having trouble getting the data to load on a model, head to the 'Data' tab on the far right of the spreadsheet, and go to the yellow cell. Then delete the cell formula, then hit Undo. This should manually refresh the data.
Here is the link to the model! Make your copy of it, plug in your API, and enjoy. We'll be on Discord to answer any questions you may have, and let us know what you think of this new perspective on daily active deposits and address activity!
Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.
Thanks for reading!
If you enjoyed this insight please leave a like, join discussion in the comments and share it with your friends!
Never miss a post from brianq!
Get 'early bird' alerts for new insights from this author