What are the 'Smart' Traders Doing?
Maybe all of us are dumb after all
Disclaimer: All views are my own
We start off by defining who all are considered as ‘smart’ traders. Well, I pretty much borrow this really well curated list of over 2500 addresses from here - which well, makes my life easy.
I created this smart traders dashboard on Flipside Crypto, from which ill borrow a few plots to track the smart traders activity.
First, we see how much money in total have these traders deployed v/s the amount they currently have in stables:
Well, that’s a sizeable amount. Let’s break down the exposure now:
Over the past one day, we can see that on aggregate, around 40% of the exposure of the traders was within ETH. With 35% of the remaining exposure in stables and around 10% in undefined (i.e. the ‘who even knows’ category above).
But what about the change in exposure within these categories over the last few months you ask? well, here we go:
We track the change in exposures over the last four months. roughly 67% - we have no idea about. 20% in eth. 11% in stables. Rest is others.
Something to note before we dive deeper into the ‘who even knows’ category - this data is just focusing on erc20 tokens - so no sol/base or other chains tokens. On a side note, Artemis provides a very cool plot to showcase bridge flows between different chains:
We can see 42% of the flows from Ethereum have gone to Base over the past one month.
Anyways, back to digging into our smart traders. Let’s see the token level aggregate exposure of these traders- to break down that 67% of unknown holdings.
Here’s the top 10 biggest gainers in terms of percentage change of their existing balance in the past day:
Top 10 losers:
Some of the new tokens being bought:
That’s a lot to dig into. Lets focus on the biggest gainer: gOHM - now that’s a token/protocol I haven’t heart off for a while. Let’s see what’s happening at that silly protocol.
Seems like there is a proposal - to let the DAO to passively lend DAI and earn supply APYs. Plus OHM holders to borrow DAI against OHM and earn Gearbox's supply APYs.
What even is Gearbox? Its a composable leverage protocol - powered by credit account abstraction. Gearbox protocol, has two sides to it:
Passive lenders - asset lenders who seek passive yield - similar to providing liquidity to Compound and getting cTokens
Borrowers - active traders, farmers and even protocols - who wish to increase their positioning by borrowing liquidity from the protocol at multiples of their collateral.
Now, Gearbox is not a trading protocol. Its a protocol which let’s people get leverage based on their collateral. The key to this is the credit accounts - which is an isolated smart contract which contains both the user funds and borrowed funds. This is where the leverage is. Every user - has their own credit account.
To summarize: a credit account is an isolated smart contract (like a leveraged smart) that holds user + borrowed funds, has liquidation thresholds, and has a list of allowed tokens and protocols
Gearbox itself - is not a trading platform/protocol. The protocol does not have its own order books, or control the secondary market liquidity. Therefore - no funding rates.
Here’s a Dune dashboard I made to track some rough Gearbox stats.
The number of credit accounts shot up with the launch of v3 of the protocol recently.
The key change with v3 is the introduction of gauges. Now to understand gauges, we need to understand the concept of quotas. Quotas are essentially similar to individual collateral limits that are applied to every credit account. Its a credit line.
Gauges are basically a tool for ‘what extra quota APY rates on top of the usual utilization curve, for every asset separately, is being paid by a borrower’. Gauges essentially act as another source of yield - extra interest rates on top of the regular ones.
In terms of deposits - what assets are being deposited the most into the protocol you ask?
Most of the deposits in wETH - followed by DAI over the last 7 and 30 days.
USDe deposits are interesting - wonder when that started - plus are they accumulating shards?
The protocol allows leveraged restaking and announced this in March:
There is no liquidity though for the USDe pool at the moment. probably spiked cause governance allowed more deposits recently.
What about the addresses who filled up the USDe deposits?
Top 50 addresses:
First few are -
1. Uniswap v3 pool
2. jaredfromsubway (MEV): MEV Bot
3. Curve.fi: CurveStableSwapNG
Any interesting addresses?
This guy is an interesting one: 0x651fAc183D2ac9753BEc39F7530aDf1B873f0314. Deposited around 2m worth of USDe - 50th largest depositor
Basically started quite small in 2020 - around $14k, went up to around 1.2m - then was underwater for all of 2023 - went down to -2.9m - finally is in the green in 2024: up around $1.4m
How about his holdings?
Biggest holding - a memecoin on Base (TOSHI) - which is up around 100% over the last 30 days. Still hasn't sold any yet.
Okay, that’s the on-chain smart traders. What about the traders on exchanges - well we can track the positioning of some of the traders on Binance Futures - via the Binance Futures API (totally a legit API)
We first track the long/short aggregate positioning of all traders on the leaderboard that reveal their positions (around 483 of them):
On aggregate, there are about 23 longs on BTC v/s 17 shorts. Overall - its just longs>shorts. So let’s zone into the top 100k traders only and track their positioning instead:
The largest long aggregate is on ONDO Finance - a protocol focusing on tokenization of real world assets. On the short side:
Its ETH/XRP/BTC tied for the most shorts.
We can also see the aggregate amount being put for the top 15 tokens on the long and short side - combined in the plot below:
Largest positions are on a bunch of memes