From where crypto on-chain data are coming from?

Question

I am pretty new to the topic and I would like to understand or if you could re-direct me to the proper source of knowledge about on-chain data, where are they coming from?

How such websites as Glassnode or CryptoQuant are able to deliver such a sophisticated charts about wallets, transactions, exchanges, market indicators etc. ?

Are all of those data publicly available on the blockchain and those companies are running kind of "queries" to get such data?

I am just wondering how it works under the hood, to be able to get such on-chain data?

I would very grateful for brief explanation or simply re-direction to good source of knowledge.

Best Regards 🙏

Answer 1

As the name "on-chain analysis" suggests, the base data are collected from blockchains. Most analytics companies combine the blockchain data with their own knowledge. Sometimes it's combined with public data that are just complicated to filter out. And sometimes they're using non-public data that they got from exchanges and other sources (possibly for this specific purpose of combining with other data and reselling the combined product, but not reselling the raw data).

Example: Exchange X has

• cold wallets A, B and C - All of this is published by the exchange.
• hot wallets D, E, F and G - Part of this is public knowledge, part is info from the exchange directly to the analytics company.
• user deposit wallets H, I, J, K, L, ... - The exchange told the analytics company and keeps them updated on new and removed deposit addresses (in exchange for some fee). Part of the agreement might be that the analytics company can't share these addresses, just the combined amount.

The analytics company can watch transactions coming from/to these wallets (this is the public blockchain data) and make a sum of how much crypto has arrived to or left from the exchange.