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Coinbase proposes new blockchain adoption metric to combat airdrop bias
Cryptocurrency exchange Coinbase has unveiled a new metric called h-index to address onchain adoption tracking biases caused by airdrop activity.
Coinbasea publicly traded US-based cryptocurrency exchange known for its development of Basica level 2 solution for Ethereum, introduced a new metric to provide a more accurate measure of blockchain network adoption. This new metric aims to mitigate distortions caused by activities related to airdrops and Sybil attacks.
In a research report On Friday, Coinbase noted that investments in blockchain infrastructure have led to a glut of block space, making onchain transactions cheaper and fueling networks with a new wave of decentralized applications. However, this change has made it difficult for analysts to track ecosystem adoption as new applications are launched.
Traditional network metrics such as total transactions or daily active addresses can be distorted by Sybil attacks and airdrop activity, Coinbase says. To address this issue, Coinbase proposes a new metric called h-index, which balances the depth and breadth of onchain adoption. The index h counts the number of addresses that receive transactions from at least the same number of unique sending addresses.
“In other words, an h-index of 100 means that 100 different receiving addresses have received transactions from at least 100 unique sending addresses in a given period of time.”
Coinbase
According to Coinbase results, when the h-index was applied, the Ethereum and Base networks showed the most widespread user activity in the week ending June 6, followed by Arbitrum and Polygon.
H Index for Blockchain Networks | Source: Coinbase
While acknowledging the metric’s imperfections, Coinbase believes the h-index can shed “new perspectives on comparative chain adoption by mitigating Sybils’ outsized influences and measuring growth more broadly.”
The cryptocurrency exchange noted, however, that challenges still remain, including differences in blockchain execution environments, which can affect transaction formats and data interpretation. Additionally, the influence of exchanges or other smart contract wallets “could also skew the numbers,” Coinbase admits.
Sybil attacks I’m a well known type of network attack in the cryptocurrency industry, where a single entity creates multiple fake identities or nodes to gain control over a network or influence its operation. This type of activity can manipulate network metrics and data by creating numerous fake accounts or addresses to artificially inflate transaction volumes or user activity to distort perceptions of network usage and adoption.