Crypto exchange Coinbase has unveiled a new metric called the h-index to address disruptions in tracking onchain adoption caused by airdrop-related activity.
Coinbase, a publicly traded US cryptocurrency exchange known for developing Base, a layer-2 solution for Ethereum, has introduced a new metric to provide a more accurate benchmark for blockchain network adoption. This new metric aims to reduce distortions caused by airdrop-related activities and Sybil attacks.
In a research report on Friday, Coinbase noted that investments in blockchain infrastructure have created an excess of block space, making onchain transactions cheaper and powering networks with a new wave of decentralized applications. However, this change also made it challenging for analysts to track ecosystem adoption as more applications were launched.
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Traditional network metrics, such as total number of transactions or daily active addresses, can be skewed by Sybil attacks and airdrop activity, Coinbase says. To address this issue, Coinbase proposes a new metric, the h-index, that balances the depth and breadth of onchain adoption. The h-index 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 received transactions from at least 100 unique sending addresses during a given time frame.”
Coin base
According to Coinbase’s findings, when the h-index was applied, Ethereum and Base networks showed the most widespread user activity for the week ending June 6, followed by Arbitrum and Polygon.
H-index for blockchain networks | Source: Coinbase
While Coinbase acknowledges the metric’s imperfections, it believes the h-index “can provide new perspectives on comparative chain adoption by mitigating Sybils’ outsized influences and measuring growth more broadly.”
However, the crypto exchange noted that challenges still exist, including differences in blockchain execution environments, which can impact transaction formats and data interpretation. Additionally, the influence of exchange or other smart contract wallets “could also skew the numbers,” Coinbase admits.
Sybil attacks are a well-known type of network attack in the crypto industry, in which a single entity creates multiple false identities or nodes to gain control of a network or affect its operation. These types of activities can manipulate network metrics and data by creating numerous fake accounts or addresses to artificially inflate transaction volumes or user activity and distort perceptions of network usage and adoption.
Read more: Arbitrum airdrop marred by Sybil attacks
