Blockchain analytics firm Chainalysis has released a new tool to track transactions across Decentralized Finance (DeFi) protocols and several blockchains.
Chainalysis released a beta version of Storyline on Wednesday. Described as “Web3’s original blockchain analysis tool,” Storyline aims to track and visualize smart contract transactions with a focus on non-perishable tokens (NFTs) and DeFi platforms. This is in line with the growing popularity and proliferation of NFTs and DeFi in the cryptocurrency space over the past year.
Chainalysis provides blockchain analysis, annual reports on crypto crime trends, and other analytics. The ever-changing landscape has seen DeFi and NFTs become important cogs in the ecosystem, with Chainalysis estimating that the two sectors account for more than half of global cryptocurrency transactions.
The unfortunate downside of this development is the growing number of crypto-based crimes that use industry-changing protocols. 2021 saw DeFi protocols process an increasing amount of value from illegitimate addresses while hackers also started targeting these platforms in an attempt to exploit and steal funds.
The amount cannot be understated either, with Chainalysis estimating that DeFi protocols accounted for 97% of the $1.68 billion in cryptocurrency stolen in 2022. The company also noted that a large percentage of DeFi hacks were carried out by North Korean hacking groups last year.
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The challenge for cryptocurrency exchanges, DeFi protocols, and investigators is to trace illicit transactions through DeFi protocols. The nature of these platforms is complex, with automated smart contracts creating complex transactions, often across multiple blockchains.
The main function of DeFi protocols is the ability to chain hopping, which gives users the ability to exchange or transfer cryptocurrencies in a single transaction. The NFT acquisition process also includes a number of moving parts, including various smart contracts across different markets.
Storyline will enable users to build their own story of the transaction path starting from the transaction hash. From there, a timeline can be created with the transactions and interactions of the tokens.
The software’s automatic feature allows the interpretation of smart contracts and the naming of common transaction types such as NFT acquisitions or token swaps. Users can add related transactions and addresses across the blockchain which can help monitor specific addresses, tokens and transactions.