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Analytics in Web3

Bradley Woolf

Analytics in Web3

Blockchain represents possible the greatest data footprint in all of computing history. In Web2, companies had interactions siloed on every proprietary database. They had extreme insight into the customer interactions, bit that was only on their site. It allowed them to monetize their own niche- whether it be search, payments, game interactions, likes, or page views.

In Web3, at least on public chains, all of this information is public. It is literally as if you took those patterns from Web2 and rolled them into one product, then made it accessible to the general public.

Now, the problem is insight. Just because you can see contextual information around how wallets are interacting with blockchains doesn't mean you can derive any useful information.

Here are some data points that provide value:

  • wallets connected to collections- you can see who has the most influence on collections
  • timestamp- see when transactions are most likely to occur for specific collections
  • amounts- what are people buying? What are they willing to spend?

Blockchains are packed with info.

What if you knew how much people were willing to spend on certain pieces, or you could backtrack how much they spent on what item and at what time? What could you do with that data?

It's the same thing as a credit card, but instead of the information being siloed (albeit with more clarity on the consumer), on the blockchain, you can do it by wallet address.

Here's how it's done:

  • two wallets make a transaction, which is recorded on the public ledger
  • indexers and listeners pick up the information by tracking protocols and specific contracts, then store it depending on the protocol/smart contract
  • users, protocols, and aggregators query those indexes to retrieve specific events emitted from the smart contract

The Graph

The Graph exists as a way to index information on a public blockchain- what this means is that you can set up your own niche Google for your specific project. They have support for all major protocols, which you can query in your own app. A graph is the ultimate data structure for on-chain information- as discussed in an Oracle talk, you can create relationships and apply models to find patterns. It's in these patterns that you will see new business models emerge.

Analytics already dominating

There are also some analytics platforms that exist, that are focused on specific niches. Dune Analytics helps users create their own dashboards, creating a marketplace of data. Chainalysis links transactions to crypto activity, such as exploits and hacks that affect protocol balances. AnChain.ai helps smaller businesses track specific addresses and provides both compliance and security auditing services. And CipherTrace is probably the most well known, given its recent acquisition by the major TradFi conglomerate, Mastercard.

When you think about crypto, it's actually doing the same thing as fiat. When you deposit money into a bank, you go from cash into the blackbox of digital transfers. Blockchain is literally the same- it's an ecosystem you swap fiat for, then are in a blackbox financial world of 1's and 0's. However, in this ecosystem, you have full transparency in to the history of movement of those 1's and 0's, all with a more efficient system of transfer and accounting. Instead of 7 day transfers through a bank, you go to milliseconds of latency for a confirmation of transfer.

The blockchain ecosystem is literally the biggest treasure trove of data that has yet to be fully exploited. Imagine when you slap a search console on top of it.

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