Coinbase introduces innovative blockchain adoption measure to address distortions caused by airdrops
Coinbase, a prominent U.S.-based cryptocurrency exchange that has developed Base, a layer-2 solution for Ethereum, has introduced a novel metric to provide a more precise assessment of blockchain network adoption. This innovative metric, known as the h-index, aims to address distortions caused by airdrop-related activities and Sybil attacks.
In a recent research report, Coinbase highlighted that investments in blockchain infrastructure have resulted in an overflow of blockspace, leading to lower transaction costs and an influx of decentralized applications. However, this surge has made it challenging for analysts to accurately monitor ecosystem adoption as more applications come into play.
Traditional network metrics like total transactions or daily active addresses can be manipulated by Sybil attacks and airdrop activities, according to Coinbase. To tackle this issue, Coinbase has proposed the h-index, a metric that strikes a balance between the depth and breadth of onchain adoption. The h-index tallies the number of addresses that receive transactions from an equal number of unique sending addresses.
Based on Coinbase’s analysis, when the h-index is applied, Ethereum and Base networks displayed the highest level of user activity for the week ending on June 6, followed by Arbitrum and Polygon.
Although Coinbase acknowledges that the h-index may not be perfect, it believes that this metric can offer fresh insights into comparative chain adoption by mitigating the impact of Sybils and providing a broader measure of growth.
Despite the potential of the h-index, Coinbase recognizes that challenges persist, including variations in blockchain execution environments that can affect transaction formats and data interpretation. Furthermore, the presence of exchange or smart contract wallets could also distort the numbers, as acknowledged by Coinbase.
Sybil attacks, a well-known type of network attack in the crypto industry, involve a single entity creating multiple fake identities or nodes to manipulate a network’s operations. This activity can deceive network metrics and data by generating false accounts or addresses to artificially inflate transaction volumes or user activity, distorting the perception of network usage and adoption.
For more information, read about the Arbitrum airdrop that was affected by Sybil attacks.
