Coinbase, a major U.S.-based cryptocurrency exchange, has introduced a new metric called the h-index to provide a more accurate measure of blockchain adoption.
This new metric aims to address distortions caused by airdrop-related activities and Sybil attacks, which have complicated the tracking of genuine on-chain activity.
As blockchain infrastructure has evolved, creating cheaper on-chain transactions and fostering the development of decentralized applications, traditional metrics such as total transactions or daily active addresses have become less reliable.
These metrics can be easily skewed by Sybil attacks—where a single entity creates numerous fake addresses—and airdrop activities that artificially inflate user engagement numbers.
In a June 7 research report, Coinbase introduced the h-index to counteract these issues.
The h-index measures the number of addresses receiving transactions from at least the same number of unique sending addresses.
For example, an h-index of 100 means that 100 different addresses have received transactions from at least 100 unique senders within a specified period.
This metric aims to balance the depth and breadth of on-chain adoption, providing a clearer picture of genuine user activity.
Applying the h-index, Coinbase found that the Ethereum and Base networks showed the most widespread user activity for the week ending June 6, followed by Arbitrum and Polygon.
While acknowledging the metric’s limitations, Coinbase believes the h-index offers valuable new perspectives on blockchain adoption, mitigating the influence of artificial activities like Sybil attacks.
Despite its promise, the h-index is not without challenges.
Differences in blockchain environments can affect transaction formats and data interpretation, and the use of exchange or smart contract wallets can still distort numbers.
However, Coinbase is optimistic that the h-index can significantly improve the accuracy of blockchain adoption metrics, offering a more nuanced understanding of user engagement and network growth.
Sybil attacks, a common issue in the crypto industry, involve creating multiple fake identities to manipulate network metrics.
These attacks, along with airdrop activities, can give a misleading picture of network adoption. Through the h-index, Coinbase aims to reduce these distortions, helping analysts and investors better understand the true levels of engagement and adoption across different blockchain networks.
