The Vital Role of Offchain Data in Safeguarding Digital Assets

In the crypto sector, the use of off-chain data is becoming increasingly prevalent, particularly in decentralized finance (DeFi) projects. The vast quantity and diversity of data we possess enhance the power of our analyses.

Considering the high level of abuse and sensitivity to cybersecurity in the crypto sector, stricter controls are required. The key is to detect and prevent incidents before they occur. As we know, blockchain technology primarily uses on-chain data, which is immutable data directly recorded on the blockchain. Examples of on-chain data include all transactions on blockchain networks like Bitcoin or Ethereum.

These transactions encompass asset transfers between addresses, the execution of smart contracts, and other blockchain activities. The states of smart contracts are also stored as on-chain data. For instance, the number of tokens locked in a DeFi protocol or the ownership of an NFT can be accessed through smart contracts on the blockchain. Block information is also recorded as on-chain data, containing all transactions, timestamps, and other crucial information.