Blockchain analytics firm Chainalysis introduced a new tool to help monitor transactions and tokens across DeFi protocols and multiple blockchains.
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Blockchain analytics firm Chainalysis has released a new tool to track transactions across Decentralized Finance protocols and multiple blockchains.
Chainalysis launched a beta version of its Storyline software on May 18. Touted as a “Web3-native blockchain analysis tool,” Storyline aims to track and visualize smart contract transactions with a focus on nonfungible 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 analysis and annual reports on cryptocurrency crime trends and other analytics. The ever-changing landscape has seen DeFi and NFTs become important cogs in the ecosystem, with Chainalysis estimating the two sectors account for more than half of global cryptocurrency transactions.
An unfortunate downside of this evolution is the increasing amount of cryptocurrency-based crimes making use of the industry-changing protocols. 2021 saw DeFi protocols process an increasing amount of value from illicit addresses while hackers also began to target these platforms in efforts to exploit and steal funds.
The amount cannot be understated either, with the Chainalysis estimating that DeFi protocols account for 97% of the $1.68 billion worth of cryptocurrency stolen in 2022. The firm also noted that a major percentage of DeFi hacks were carried out by North Korean hacking groups last year.
The challenge for cryptocurrency exchanges, DeFi protocols and investigators is tracking 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 ‘chain-hop’, giving users the ability to exchange or move cryptocurrencies in a single transaction. The process of purchasing an NFT also involves a number of moving parts, including different smart contracts across different marketplaces.
Storyline will enable users to build their own ‘story’ of a transaction pathway starting with a transaction hash. From there, a timeline can be built with notable transactions and interactions of tokens.
An automated feature allows the software to interpret smart contracts and label common transaction types like NFT acquisitions or token swaps. Users can add related transactions and relevant addresses across blockchains which can help monitor specific addresses, tokens and transactions.