The perfect match that the integration between Nexo Pro and The Tie has come to be rightfully deserves a deep dive. And what better way to delve into the tasty bits and specifics of trading data and analysis provision than with the exclusive March edition of Nexo’s AMA. Nexo Co-Founder and Managing Partner Antoni Trenchev is the signature host, joined by his counterpart from The Tie, CEO Joshua Frank.
Read on for the highlights or better yet – watch the video below for the full session, including Joshua’s background in crypto and a couple of tongue-in-cheek questions from Antoni.
Q (05:21): Why did you decide to work with The Tie as a provider?
Antoni: We are known to try and partner up with the best at what they do. Our team has been able to evaluate The Tie very highly among the top-tier providers, if not the top-tier provider, of the services that we have integrated on the Nexo platform, so it is synergetic. It's no secret that the VC fund that we have at Nexo invested in their funding rounds, so this is also very important to us – to not only be financial investors, but also to help the companies that we invest in get traction and expand to new horizons. This obviously goes hand-in-hand with integrating with our existing platforms so I personally am excited.
Q (07:28): As an aggregator, you have tons of inflow info including Twitter data. Do you see differences or trends in the people who talk about crypto across different channels?
Joshua: In addition to a lot of on-chain data, we have integrated a lot of sentiment data in the Nexo platform. In crypto, there's actually a very broad distribution of where conversations occur. The majority of those conversations are on Twitter, however there remains a large base of people that interact with crypto on 4chan, Tik Tok, Discord, Reddit, YouTube and there's actually a pretty big difference in those user bases. I like to look at channels like YouTube and Tik Tok as a proxy for retail interest on the furthest ends of retail.
Those on Twitter are probably a bit more of what I would define as crypto natives – those that have been in the space for awhile. Reddit is similar and 4chan I would say is a little bit more degenerate, probably the right way to describe it. We've specifically integrated into Nexo what is by far the most important platform – Twitter. Twitter is kind of the epicenter of conversations in crypto – we're seeing anywhere from 300,000 to 400,000 tweets a day coming from non-bot accounts.
Q (09:40): How do you fight the noise created by bots, so that it doesn't muddy up the accurate picture that you're trying to provide?
Joshua: Yeah, it's definitely a challenge. There's actually a couple of things. The first is trying to assess whether a tweet is relevant to a particular asset and that's actually not trivial. For example, if you take Avalanche – Avalanche is obviously a cryptocurrency that we all know, but Avalanche is also a hockey team in Colorado, it's also a weather event. Sometimes these cryptocurrencies are generic words, so you have this topic model issue, which is the first thing that you have to solve.
And then the second thing is, once we figure out that these messages are actually about crypto, how do we make sure that those messages are coming from real accounts? There are a bunch of different things that we do – actually 13 different things. One is looking at their follower-to-following ratio so if somebody follows 900 accounts and has one follower that's generally a decent way to weed something out.
We'll look at the history of the account – if the account’s only been around for a week, we're not going to score that the same way as an account that's been around for 4 years. If the account only tweets about a particular asset, that is also a red flag. Is the account mentioning six tokens in a tweet? A lot of times there are accounts that will just push out the prices of the top 10 cryptos all the time – that's not a real account. There are a number of different things that we're doing even to the point of trying to assess the accuracy of the predictions that the account is making to ensure that the conversations that we're picking up are from real accounts.
Q (12:31): Will there be ways to set up notifications, trades, automatic actions on Nexo Pro, based on certain trends in the insights section?
Antoni: First of all, we want people to be making their own decisions rather than us trying to push them in a particular way. We don't do that – we find this wrong on a number of different levels and we are not financial advisors. We believe in the ethos of our collective blockchain space, which is to generate financial freedom and in a way that you see fit. Rather than saying “token XYZ is hot right now it's up 15% so perhaps you should pick up some”, we would like to give you the tools to set up your own alerts, your own trading setup in the way that you see fit.
This is what we are about actually – building the infrastructure that will give you the capability to customize and personalize your trading setup, so that you can make the decisions that are right for you.
Joshua: I would add it’s the ability to add alerts, but they're all accustomed to you. If you want to set an alert anytime Bitcoin sees an increase in Twitter activity or an increase in price, if you think that that is a strategy that you'd like to trade it off of, you can set an alert and you'll get notified when that alert criteria is met.
Q (14:55): How often will the news feed be updated and which are the sources that will be used?
Joshua: The news feed is actually going to be updated faster than every minute, I think around 10 or 15 seconds, so it's very fast. We're pulling data from crypto native sources which could be anything from Coindesk to Blockworks, The Block, Cointelegraph and a bunch of other sources like more traditional finance publications – The Wall Street Journal, The Financial Times and technology publications. There's a few hundred different sources, so don't go wild on the personalized alerts and setups otherwise your screen time will explode.
Q (16:08): You said that the tools from the new integration are mostly available to institutions. What does this mean and why is Nexo providing them to individual traders?
Antoni: When we launched Nexo Pro the whole idea was to give you the tools to trade like the professionals. The markets have gotten so sophisticated that you as an individual trader should by all means have access to the same tools as the professionals so that you have a better fighting chance. This is what we at Nexo have always been about – providing you great tools. We were the first to give access to aggregated liquidity and order books to the retail – no institutional desk or high frequency trader would trade without those. What we are doing with The Tie is just the natural extension of this philosophy and that's why we are so excited to be bringing up onto the platform all of these capabilities.
Q (18:31): To what extent will I be able to adjust the on-chain activity indicators and how close to real time will the data be updated?
Joshua: There are a large number of different on-chain indicators that we've integrated into Nexo. One of my favorite indicators is the one-hour exchange netflow, which basically tells you the net inflow or outflow from exchanges over the last hour. That's really helpful because if you think about it, if people are sending stablecoins to exchanges, what are they more likely to do? It's to purchase assets, right? If you're removing assets from an exchange that means that the user is more likely to hold them so that's an example of a metric that we have.
We also have TVL-related data, which is really cool so you can track the total value locked in these different platforms. We have metrics ranging from the number of active addresses to the number of transactions on-chain. The data is actually updated on a block-by-block basis for almost every metric – we run nodes on different chains, so we're tracking this data in real time. You're getting the data as fast as our institutional clients.
Q (21:26): How can I be sure that the data provided by the time is timely and accurate?
Joshua: We talked a little bit about sentiment as an example and how we eliminate bots. We have a team of about 90 people and the vast majority is data scientists and software engineers, who make sure that our data is accurate. In terms of timeliness, you can see data updating in real time on the platform, you can see the news feeds coming in. In terms of accuracy, that's an initiative that we spend a tremendous amount of time on. What I can tell you is that we have 150 institutional clients that pay for The Tie directly.
The data that we're providing Nexo is a portion of the data that we provide to our institutional customers, but it is the exact same data. There is no difference between what we're providing you and what we'd be providing a 50 billion dollar hedge fund. It's a huge initiative that we spend a tremendous amount of our time on because it's what our business is built on and what our clients rely upon.
Q (27:08): What was your first thought when Nexo reached out to invest in The Tie?
Joshua: I was obviously very excited. Nexo is a big firm and when we raised capital, it's really reassuring to have some of the top firms in the crypto space work together with you and invest in you. The investment was actually birthed out of, in part, this partnership conversation so the two kind of came together. When we were looking to raise capital, we actually turned down a number of the the tier-one Silicon Valley VCs.
We decided to go for strategic partners instead because I think at the end of the day, when you're growing a business it's not about how much capital you raise or whose name is on the round – it's who's the partner that's going to help you grow your business. In this case, Nexo is a great partner for us because this is a partnership where we can increase our distribution. I think it has been a success story.