Reading the Chain: A Practical Guide to ERC-20, NFTs and Tracking ETH Transactions

Whoa. Chain data can feel like a foreign city at midnight — neon signs everywhere, but you don’t know which alley leads to safety. My first few months watching Ethereum felt like that. I stared at addresses, gas numbers, and event logs and thought: what am I even looking at?

Okay, so check this out—there’s a pattern once you know where to look. ERC-20 tokens, NFT transfers, and ETH transactions all leave fingerprints on-chain. Those fingerprints are readable, if you learn to read the right fields and interpret the little oddities. I’ll be honest: somethin’ about raw logs still bugs me. But you’ll get the gist fast.

At a high level, an ETH transaction changes state. It might move ETH, call a smart contract, mint an NFT, or approve an allowance. Each action creates data: the transaction receipt, logs (events), gas used, and status. Learning to map those pieces back to real-world events is the whole game.

How to read ERC-20 token activity (quick primer)

Start with the transaction details. Look for the “To” address and the input data. If the “To” is a token contract, the input encodes the method. Transfer events usually show up in logs. On explorers like etherscan blockchain explorer you can see the decoded events and a token transfer line right away, which helps a ton.

Two things matter for ERC-20:

• Decimals — tokens have a “decimals” field (commonly 18). So 1 token may be stored as 1000000000000000000. If you miss that, balances look insane.
• Approve/allowance — that approval step is how DEXs and contracts get spending rights. Always check allowances; they grant power to another address.

Look at logs (the event data). An ERC-20 Transfer event follows the signature Transfer(address indexed from, address indexed to, uint256 value). The indexed fields show up as topics, which most explorers decode for you. If you’re debugging low-level, topics[1] is “from”, topics[2] is “to”.

Initially I thought the transfer list was the whole story, but then I realized internal transactions matter. A top-level transfer might not show an internal ETH move unless you toggle the internal tx tab. Actually, wait—let me rephrase that: always check internal transactions for ETH sent inside contract calls, because they don’t appear as regular token transfers.

NFTs and token metadata — why transfers are just half the tale

NFTs usually conform to ERC-721 or ERC-1155. A Transfer event tells you ownership changed. But token metadata (the name, image, attributes) lives off-chain or on IPFS. The tokenURI in the contract points to JSON that your UI will fetch to render art or attributes.

Heads-up: the tokenURI can point to an HTTP endpoint that a project controls. That means images and metadata can change. On one hand, mutability allows useful updates; on the other, it’s a vector for surprise. I’m biased toward immutability, but pragmatically many projects mix approaches.

When you inspect an NFT transfer on an explorer, check the contract’s verified source. Verified contracts let you read public variables and sometimes the tokenURI function directly from the page. If the source isn’t verified, you can still read logs, but interpreting intent is harder.

Gas, pending txs, and the mempool — what to watch for

Gas price and gas used are simple but crucial. They tell you how much the sender paid and how complex the call was. A failed transaction still consumes gas. So when you see a failed status, look at gasUsed vs gasLimit. That tells you if a revert happened or if the transaction ran out of gas.

Pending transactions sit in the mempool. If you’re monitoring for front-running or MEV, track nonce sequences and gas price spikes. On-chain explorers show pending txs for an address, which helps with quick situational awareness. If you care about MEV risk, small timing differences and gas price hints often tell the story.

Something felt off about relying solely on the explorer for mempool intelligence. For deep analysis, a direct node or specialized service is better. Still, for day-to-day tracking, a good explorer gets you 80% of the way.

Practical workflows I use

Short checklist I run when investigating a token or NFT transfer:

1. Open the tx hash. Scan status, block number, gas used.
2. Check “To” — is it a contract, a known exchange, or a wallet?
3. Inspect logs/events — decode Transfer, Approval, Mint, Burn.
4. Look at internal txs for hidden ETH movements.
5. Open the contract page — is the source verified? Read public methods if needed.
6. Assess token holders and top transfers for suspicious movements.

On tricky cases — rug pulls, suspicious mints — I dig into allowances and multisig ownership. If a token transfer empties a liquidity pair address, that’s a red flag. If tokens are sent to a burn or zero address, it’s a different story (sometimes intentional).

On one hand, explorers make a lot visible. On the other hand, some things remain opaque (off-chain governance decisions, centralized metadata control). So trust but verify—especially with approvals and contracts you interact with frequently.

To wrap up (and yes, I’m circling back), learning to read the chain is less about memorizing UI elements and more about pattern recognition. Watch a handful of transfers, trace them to contract calls, and you’ll start to sense what’s normal and what’s shady. It’s not perfect. But it works.