Blockchain analytics company Chainalysis unveiled a new tool to help monitor transactions and tokens across DeFi protocols and multiple blockchains.
Blockchain analytics company Chainalysis has launched a new tool to track transactions across decentralised finance (DeFi) protocols and various blockchains.
Chainalysis this week launched a beta version of its Storyline software. Billed as a “Web3-native blockchain analytics tool”, Storyline aims to track and visualise smart contract transactions with a focus on non-fungible tokens (NFTs) and DeFi platforms. This is in line with the growing popularity and prevalence of NFTs and DeFi in the cryptocurrency space over the past year.
Chainalysis provides blockchain analytics and annual reports on cryptocurrency crime trends and other analysis. The ever-changing landscape has seen DeFi and NFTs become important cogs in the ecosystem, with Chainalysis estimating that both sectors account for more than half of global cryptocurrency transactions.
An unfortunate downside of this evolution is the growing amount of cryptocurrency-based crime that makes use of industry-changing protocols. In 2021, DeFi protocols processed an increasing amount of value from illicit addresses, while hackers also began targeting these platforms in their efforts to mine and steal funds.
The amount cannot be underestimated either, with Chainalysis estimating that DeFi protocols account for 97% of the USD 1.68 billion in cryptocurrencies stolen in 2022. The firm also noted that a significant percentage of DeFi hacks were carried out by North Korean hacking groups last year.
The challenge for cryptocurrency exchanges, DeFi protocols and researchers is to track illicit transactions through DeFi protocols. The nature of these platforms is complex, with automated smart contracts creating complex transactions, often across multiple blockchains.
A key function of DeFi protocols is the ability to perform blockchain hopping, giving users the ability to exchange or move cryptocurrencies in a single transaction. The process of buying an NFT also involves a number of moving parts, including different smart contracts across different marketplaces.
Storyline will allow users to build their own history of the path of a transaction, starting with the hash of the transaction. From there, a timeline can be built with highlighted token transactions and interactions.
An automated feature allows the software to interpret smart contracts and tag the most common transaction types, such as NFT purchases or token swaps. Users can add related transactions and relevant addresses across the blockchain that can help monitor specific addresses, tokens and transactions.