DeFi-ing exploits: New Chainalysis tool tracks stolen crypto across multiple chains
Chainalysis, a blockchain analytics company, has created a new tool that tracks transactions across multiple blockchains and decentralized finance protocols.
Chainalysis released a beta version Wednesday of its Storylinesoftware. Storyline is a Web3-native, blockchain analysis tool that tracks and visualizes smart contract transactions. It focuses on DeFi platforms and nonfungible tokens (NFTs). This is in keeping with the increasing popularity and prevalence NFTs as well as DeFi in cryptocurrency over the last year.
Chainalysis offers annual reports and analysis on blockchain trends, as well as analyses of cryptocurrency crime and other analytics. Chainalysis estimates that DeFi and NFTs account for over half of all global cryptocurrency transactions.
This evolution has had a negative effect on the number of crimes based on cryptocurrency, which are now using the industry-changing protocols. DeFi protocols processed an increasing amount from illicit addresses in 2021. Hackers also started to target these platforms to steal and exploit funds.
Chainalysis estimates that DeFi protocols are responsible for 97%, or $1.68 billion, of all the cryptocurrency stolen by hackers in 2022. According to the firm, a large percentage of DeFi hacks was carried out last year by North Korean hackers.
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Investigators and cryptocurrency exchanges face a challenge in tracking illegal transactions using DeFi protocols. These platforms are complex because automated smart contracts create complex transactions across multiple blockchains.
DeFi protocols have the key function of chain-hopping, which allows users to trade or move cryptocurrency in one transaction. There are many moving parts involved in purchasing NFTs. These include smart contracts from different markets.
Storyline allows users to create their own story about a transaction path starting with a transaction haveh. You can then build a timeline with notable transactions or interactions of tokens.
The software can automatically interpret smart contracts and label common transaction types such as NFT acquisitions and token swaps. You can add transactions to related addresses and addresses across multiple blockchains, which can be used to monitor specific addresses and tokens.
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