Part 2: Digital Asset Data Providers

 "Data is the new oil. It's valuable, but if unrefined it cannot really be used. It has to be changed into gas, plastic, chemicals, etc to create a valuable entity that drives profitable activity; so must data be broken down, analyzed for it to have value." – Clive Humby, Chief Data Scientist, Starcount (2006)

 

Raw data is an essential foundation for value creation and economic activity in the digital asset space. Much like oil, digital asset data is effectively unusable in the state in which it is collected. If raw data is the crude oil of digital assets, then entities that collect, process, and standardize this data into consumable formats are comparable to refineries. Financial institutions, developers, traders, and investors all rely on the services of these data providers to make sense of the ever- growing sea of digital asset data. This part of the report explores key digital asset data providers for market, on-chain and forensic data. It finishes with an overview of data providers' fundraising and M&A activity.

The following table compares leading market data providers across a range of metrics pertaining to aggregated, trade, order book, and derivatives data, as well as the number of exchanges and features they support. While some data providers may seem similar at a glance, there is a large degree of variance in the specific features and the depth of their offerings.

Amberdata offers comprehensive coverage of all the market data categories. Amberdata also provides historical data related to liquidations, order books, and trades that are usually not provided by exchanges (due to the aforementioned high storage requirements for such data). The company also offers three types of reference rates: (i) weighted averages such as Volume Weighted Average Price (VWAP) and Time Weighted Average Price (TWAP), (ii) pre-trade reference rates describing the best takable price across a number of exchanges, and (iii) single asset index reference rates which calculate average prices across several fiat currency and stablecoin pairs. Amberdata provides snapshots (one minute apart) of entire order books across spot, swap, futures, and options markets. Although some data providers offer snapshots at a lower frequency, Amberdata records all the updates (gapless data) to order books, making snapshots less relevant. As Amberdata records what happens between snapshots, it allows clients to replay the order book tick-by-tick. Following its acquisition of Genesis Volatility in October 2022, Amberdata's derivatives data expanded coverage to on-chain options protocols such as Ribbon Finance and Lyra. Layer-2 scaling platforms have made derivatives trading more practical on Ethereum, and as such, the on-chain derivatives space is likely to see increased user adoption. Amberdata delivers data in a variety of formats such as APIs, cloud-based delivery formats like Amazon S3 (Simple Storage Service), and WebSockets. Amberdata also offers FIX Protocol delivery for trades, OHLCV, and order book snapshots and updates for swaps, futures, and spot trading.

 

CoinAPI's data offering spans aggregate data such as reference rate and OHLCV candlesticks, trade data, order book data, and derivatives data. Its reference rate is a 24-hour VWAP for a number of exchanges. Along with real-time data, CoinAPI offers historical trade data via REST APIs. The organization provides current order book data that covers the entire depth (all bids and asks) and historical order book data with the top 50 bids and asks (Level 2). CoinAPI provides futures and options data from CEXes like Binance, Deribit, and Bybit. CoinAPI delivers data via REST and FIX APIs and WebSockets.

 

CoinGecko is a data provider with products similar to those of CoinMarketCap. It offers price and volume data (spot/derivatives) as well as charts for thousands of tokens across hundreds of exchanges. CoinGecko also hosts its own proprietary API with endpoints that return various types of market data including live trading volume, live prices, exchange volumes, historical data, and derivatives data.

 

CoinMarketCap has found a strong niche in providing retail market participants with tools and services to deepen their understanding of the digital asset landscape. CoinMarketCap offers price, volume, and market cap data for nearly 9,000 digital assets and allows users to rank them across any of those metrics. Its platform also allows users to view the trading volume, average liquidity, and the number of markets and coins supported for over 200 CEXes and DEXes across spot, derivatives, and lending protocols. Additionally, CoinMarketCap hosts blockchain explorers for Bitcoin, Ethereum, Litecoin, and BNB Chain that allow users to search blocks, addresses, and specific transactions. For more sophisticated users, CoinMarketCap offers an API consisting of a suite of RESTful JSON endpoints that return cryptocurrency, exchange, global metrics, and fiat currency data.

 

As the market data provided by companies such as CoinMarketCap is freely available, their websites have emerged as popular destinations for retail investors. While a number of other providers such as CoinGecko, CryptoCompare, and Nomics provide similar services, CoinMarketCap still remains the most popular destination for free, retail-facing dashboards - since the beginning of 2022, monthly page views of its website have ranged between 40 million and 70 million according to data from semrush.com.

 

Coin Metrics hosts several unique digital asset market data products. Its market data feed provides historical and real-time data for data types including order book snapshots, OHLCV candlesticks, open interest, funding rates, and liquidations delivered via WebSocket APIs. Additionally, Coin Metrics offers a suite of single-asset, multi-asset, and unique crypto asset benchmarks, CMBI (Coin Metrics Bletchley Indexes) used by crypto and traditional financial institutions. In collaboration with MSCI and Goldman Sachs, it recently announced datonomy, a classification system for digital assets. Datonomy aims to create a standard method for market participants to analyze digital assets to enhance risk management, reporting, and strategization. Coin Metrics's order book data provides 10-second snapshots for +/-10% depth and top 100 bids and asks. It also gives snapshots of the entire order book that are one hour apart. Coin Metrics offers calculation agent services for institutions seeking to administer their custom indexes as well.

 

CryptoCompare offers a suite of data products suitable for both institutional and retail market participants. CryptoCompare delivers spot and derivative CEX market data via REST API in JSON and CSV formats. Its data is also standardized across instruments to allow for comparisons across markets, strategy backtesting, and market research. CryptoCompare also offers granular and standardized order book data (level 2) captured in snapshots once per minute, containing the top 30 bids and asks. The organization also provides indices in collaboration with MVIS (MarketVector Indices), Blockdaemon, and FT Wilshire.

 

Kaiko's centralized venue market data covers all market data categories except on-chain derivatives. Although Kaiko's trading data goes back to 2011, its order book data goes back as far as 2017. It offers snapshots of all the bids and asks within 10% of the best bid and ask twice a minute. It also provides tick-level order books daily via CSV files and the 5-week rolling history via Kaiko Stream. Kaiko offers quantitative data designed to produce actionable insights, including implied volatility, custom portfolio valuation, and a Value at Risk (VaR) estimator for single and multi-asset portfolios. Kaiko provides two types of rates: price and reference rates. While the company's price rates do not require exchanges to satisfy specific criteria, reference rates are derived from prices on exchanges that fulfill certain conditions, such as being in operation for at least five years, maintaining strong KYC/AML control, and offering APIs and WebSockets.

 

Lukka offers aggregate data, trade data, and derivatives analytics for digital asset markets. The aggregate data consists of reference rates calculated using methodologies like fair market value (FMV), VWAP, and TWAP, which align with International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP). A detailed methodology for how Lukka arrives at reference rates can be found here. It also provides OHLCV candlestick data for historical trades along with the executed trades. The organization provides two types of order book data –(i) real-time data for best bid and ask, and (ii) historical data for the 10 bids and asks. Lukka offers derivatives analytics such as implied volatility and volatility surfaces that can be leveraged by funds employing quantitative trading strategies.

 

Nomics largely caters to retail users with its Nomics.com website, which features price data, market cap data, volume data, and charting for thousands of digital assets. It was built entirely using the Nomics API, suitable for market research, intelligence, trade execution, and strategy backtesting. Nomics added support for live and historical order book data in 2021.

 

With several decades of experience in traditional finance, Nasdaq, in partnership with Amberdata, has begun to offer historical market data related to digital assets such as reference rates, trade data, and order book data. The order book data dates back to the beginning of 2019. Nasdaq partners with other data providers to deliver many digital asset data products such as daily price indices, hourly & end-of-day OHLCV data, and crypto asset ratios and sentiment data via Nasdaq Data Link.

 

The following subsection outlines key on-chain data providers and their service offerings.

 

Blockchain explorers like Etherscan are useful for analyzing on-chain activity on an ad-hoc basis. However, extracting time series of various data parameters from Etherescan can be burdensome. This is where data providers with services tailored towards institutions can be helpful, as they add structure to on-chain data.

 

The table below outlines the on-chain data offerings of several leading providers and the blockchains they support. As previously mentioned, on-chain data spans three general categories: (i) network data which captures the usage of layer-1 and layer-2 networks, (ii) DeFi data which captures the usage of different decentralized applications built on top of layer-1 and layer-2 networks, and (iii) NFT data which captures activity related to the issuance and trading of NFTs. Ethereum is the most widely supported network covered by on-chain data providers.

 

Given recent developments in DeFi and NFT data provision, this research report focuses primarily on firms with offerings in these nascent categories. For more information on network data providers, please refer to The Block Research's Digital Asset Data and Infrastructure: 2021 report.

 

Amberdata provides institutions with comprehensive DeFi data pertaining to categories such as trading, liquidity pools, governance, and protocol-related data. Its offering takes block-by-block snapshots of DeFi protocols such as DEXes and lending/borrowing markets. In order to cover DeFi data holistically, Amberdata breaks it down into four lenses: protocol, asset/pool, wallet, and governance. The protocol lens gives an overview of a protocol using metrics including aggregate deposits (i.e., TVL), liquidations, borrowings, and repayments. The asset or pool lens retrieves information about a particular asset. The wallet lens provides data from the perspective of wallets (i.e., a particular address' interactions with individual protocols). This is helpful for accounting and taxation because it provides point estimates of address balances and their dollar values at any historical point. The governance lens provides information regarding protocol governance-related metrics such as voting power and resolution of prior votes. Amberdata provides this data for EVM- compatible chains Arbitrum, Avalanche, Ethereum, Optimism, and Polygon.

 

DeFiLlama's offering targets both retail and institutional participants and can be divided into two categories – dashboard and tools. The dashboard aggregates data such as liquidity pool statistics, yield overview, TVL, volumes, airdrops, and fundraises. Its data, which is fully open- sourced, spans multiple DeFi categories and 145 blockchains. It gives a yield and volume overview of several liquidity pools across 53 chains. Along with the pool yields, the company provides breakdowns of yield in the form of base APY (i.e., organic protocol revenue) and reward APY (i.e., inflationary token rewards). The dashboard includes DeFi liquidations and fees/revenues of protocols that are useful to analyze protocols.

 

Tools provided by DeFiLlama include token watchlists, trending contract tracking, and token liquidity metrics. Trending contracts show Ethereum and Polygon smart contracts that were used in recent (up to 100 minutes) transactions. Token liquidity lets users find the liquidity of a token in terms of another token and the most liquid venue for executing the trade.

 

Dune runs nodes on ten blockchains (Arbitrum, Avalanche C-Chain, Bitcoin, BNB Chain, Ethereum, Fantom, Gnosis Chain, Optimism, Polygon, and Solana) and stores the blockchain data in a database compatible with SQL, a programming language designed for manipulating relational databases. Dune's basic services offer powerful tools for researchers and retail participants to flexibly query, curate, and analyze on-chain data. Dashboards created by non- paying accounts are free for everyone to view.

 

This flexibility, however, comes with certain costs. First, users must be proficient in SQL. Second, it demands customer awareness of on-chain data generation. For example, if a user wants to know the circulating supply of an ERC-20 token, they must know the token generating address, whether the token has a burning mechanism, etc. Third, since Dune doesn't update data in real- time it does not work well with models that take in real-time data.

 

In addition to this free offering, Dune also offers paid services that allow users to export the results of a query to CSV and keep queries and dashboards private.

 

Like Dune, Flipside Crypto collects data from a variety of blockchains and stores it in a SQL/Snowflake database that users can query for free. Unlike Dune, Flipside has no paid tiers – instead, protocols partner with the platform to issue bounties for specific dashboards to be queried using SQL. Users can access Flipside's API via its ShroomDK SDK by minting a ShroomDK NFT, which ties to an API key. Flipside provides data on 15 chains, including EVM-compatible chains such as Avalanche, Ethereum and Polygon as well as Algorand, Cosmos, and Solana.

 

Kaiko's DeFi data offering is geared towards institutions and covers two DeFi subsegments: DEXes and lending protocols. Lending protocols supported by Kaiko include Aave, Compound, and Cream. Kaiko's lending and borrowing data offers insight into total borrows, deposits, and APY for the three protocols mentioned above. Kaiko's DEX data consists of trade data and liquidity pool snapshots. Kaiko provides insights into all DEX trades and liquidity events (pool deposits and withdrawals). Kaiko also offers historical DeFi data that enables investors to run backtests on liquidity provisioning or trading strategies via REST APIs.

 

Nansen provides a global view of liquidity and staking pools across six EVM-compatible chains and a tool that shows contracts that recently received high inflows – thus allowing investors to stay up-to-date with newly deployed pools generating high interest. A 'wallet profiler' shows information about all addresses such as activity, held tokens, token-wise profit and loss, and frequent counterparties. Nansen also provides data covering inter-chain bridges with metrics such as total bridge and the number of depositors to bridge smart contracts.

 

Token Terminal is an analytics platform for DeFi. It monitors DeFi protocols and provides metrics such as fee earned, revenue, treasury holdings, expenses, fully diluted market capitalization, and price-to-sales ratio. These metrics allow users to evaluate DeFi protocols like companies and help compare their valuations.

 

DeBank, Zapper, and Zerion are DeFi portfolio tracker tools. DeBank allows users to track over 1,500 protocols across 39 chains. In addition to portfolio tracking, Zapper allows users to swap and manage their assets through its application which also provides data on liquidity pools and staking opportunities across ~150 DeFi protocols. Like Zapper, Zerion allows users to manage their portfolio by letting them trade, lend, and borrow from the app with over 10 chains and 500 protocols.

 

Case Study: DeFi DEX Data

 

Supported DEXes: The quantity of DEX protocols supported by individual data providers varies meaningfully. Institutionally-focused data providers, such as Amberdata and Kaiko, have concentrated their offerings around the most widely used protocols. Both of these firms' DEX data covers Balancer, Curve, Sushiswap, and Uniswap (V2, V3) – which collectively account for the bulk of DEX trading volume. Retail-oriented firms such as DeFiLlama and Nansen have DEX data offerings that cover the longer tail of protocols, including those with relatively low levels of adoption, yet provide far less granular data.

 

APR Monitoring: DEX liquidity providers (LPs) earn token rewards (i.e., user trading fees and native token rewards) in return for committing capital to facilitate DEX trading. As displayed in the table above, the majority of providers publish annual percentage rate (APR) metrics which approximate the gross amount of yield LPs have earned relative to the total amount of capital that they have committed to liquidity pools.

 

Impermanent Loss Tracking: While APR statistics approximate the gross amount of token rewards paid to LPs, they do not take into account impermanent loss. As displayed in the table above, providers such as Amberdata have specialized in calculating impermanent loss across LP positions to provide market participants with a holistic view of LP returns that takes into account the implicit costs that come with providing liquidity.

OHLCV and Tick Level Data: Similar to CEX market data, DEX price and volume data are collected and aggregated across trading pairs and DEXes. Institutionally-focused firms Amberdata and Kaiko provide metrics that enable customers to track trading data at not only the aggregate level (i.e., OHLCV) but also at a granular trade level across the DEXes they support.

 

TVL Metrics: As displayed in the chart above, all DEX data providers support TVL metrics. Total Value locked allows users to analyze the liquidity for different trading pairs (and by extension implicit transaction costs such as slippage) across different DEXes and different layer-1 and layer- 2 blockchains.

 

While DeFi has emerged as a major use case of layer-1 and layer-2 networks, NFTs had a breakthrough year in 2022 and have captured the interest of institutional and retail investors, alike. A new class of firms focused primarily on NFT data has emerged.

 

 

The following table compares leading NFT data and analytics providers across a range of metrics pertaining to trading volume, price, and other variables such as rarity scores.

CryptoSlam and DappRadar focus on aggregating NFT data across 15 and 23 blockchains, respectively. They showcase historical trading data of various NFT collections such as the number of buyers and sellers, volume, and unique active addresses. While DappRadar may not offer some of the more granular data products or APIs of other providers, it provides NFT trade data, upcoming mint info, portfolio tracking, and marketplace data across the largest number of chains. CryptoSlam covers the second highest number of chains at 19, but also offers an API that provides NFT data aggregation across supported chains.

 

Just as with other on-chain data, Dune and Flipside Crypto enable their communities to write SQL queries to generate NFT-related dashboards. Accordingly, metrics tracked across individual NFT collections and trading venues vary based on community participation for providers such as Dune and Flipside.

 

Nansen's offering includes NFT market overview data (market cap of all collections, average price, floor price, number of wallets holding a particular collection), latest mints, and undervalued NFTs based on their traits. The company also provides information including NFT exchange- related data, NFT holder distribution, rarity scores, breakdown of NFT mints, and sale listings by wallet types.

 

Nansen offers a suite of unique NFT analytic tools. The platform's 'NFT Paradise' dashboard provides users with the mints of the latest NFT collections sorted by the number of minters in the previous 15 minutes, NFT transactions for addresses labeled as smart money based on their historical performance, and an NFT Sniper section which tracks the top 5 undervalued listings from each NFT collection on OpenSea. Nansen's 'NFT Item Profiler' and 'Rarity Profiler' allow users to view the trade history, rarity, price estimates, and the rarity of particular features of a specific NFT within a collection. Perhaps most uniquely, Nansen has created 6 NFT Indexes to track NFT market activity across the top 500 Ethereum NFT collections, the top 10 NFT collections, the top 100 social NFT collections, the top 50 gaming NFT collections, and the top 20 metaverse-related collections.

 

Icy.Tools and NFTGo provide NFT data such as ownership distribution, historical floor prices of collections, and historical trade and mint data. Rarity.Tools and Trait Sniper specialize in deconstructing metadata to capture different traits of NFTs in several collections and score NFTs based on the rarity of the traits within a collection. All four of the aforementioned firms provide data exclusively related to NFTs issued on Ethereum.

 

Although NonFungible.com offers historical trading and mint data readily available on its website, the company pivoted its model to on-demand data and consulting for NFT project developers, collectors, and investors. NonFungible.com delivers data for the three chains on which it runs proprietary nodes: Ethereum, Flow, and Ronin. As with market and on-chain data providers, NFT data providers tailor their offerings to the needs of different classes of market participants. While many NFT data providers create services with retail users in mind, NonFungible.com offers multiple services for enterprises and institutions as well. In addition to NFT data, NonFungible.com provides businesses with existing NFT-related offerings and those looking to create new ones with go-to-market and tokenomics refining advisory services.

 

In summary, the following table displays the product offerings, target customers, and pricing models of all on-chain data providers analyzed in this section of the report. Notably, the vast majority of retail-focused firms provide standardized pricing for their offerings while institutionally- focused firms customize pricing based on the bespoke needs of their customers.

 

 

The next subsection sheds light on the service offerings of digital asset data providers for forensics and market surveillance.

While the aforementioned firms' offerings span market and on-chain data, companies focused on forensics and market surveillance have also emerged as important players in the digital asset data landscape. Forensics and Market Surveillance firms source and analyze market and on- chain data, integrate this data into bespoke software solutions, and sell these products to financial institutions, regulatory bodies, and government agencies.

 

Blockchain Intelligence Group provides four core products. 'BitRank Verified' screens addresses and transactions, for example regarding AML compliance. 'QLUE' is a blockchain visualization engine used to analyze, identify, and track nefarious crypto activities. 'Crypto Investigations' is a platform to connect victims of scams with certified crypto investigators. 'Address Watch' is an automated crypto alert service to track addresses.

 

Chainalysis offers a variety of products that can be of use for a wide range of activities such as monitoring an entity's activity or complying with sanctions. 'Chainalysis Reactor' identifies, labels, and visualizes addresses an individual or entity interacted with and hence can be used to monitor suspicious activities. 'Chainalysis KYT' is a compliance software for crypto businesses that can be tailored to a client's risk management and risk appetite. 'Chainalysis Cryptos' is a tool to carry out due diligence in the crypto space, such as, for example, tracking cryptocurrency businesses' on-chain activity. 'Chainalysis Business Data' is a software product that helps crypto businesses gain insights into customer behavior from engagement with their platform. 'Chainalysis Market Intel' provides investors with cryptocurrency market data. 'Chainalysis Crypto Sanctions Screening Tool' is a free sanctions compliance screening software.

 

CipherTrace features four core products that help users maintain compliance with AML laws. 'CipherTrace Armada' offers cryptocurrency risk and fraud controls for financial institutions. 'CipherTrace Inspector' allows clients to carry out financial investigations and blockchain forensics. 'CipherTrace Sentry' is a tool for cryptocurrency anti-money laundering transaction monitoring. 'CipherTrace Traveller' helps customers comply with global travel rule regulations. CypherTrace was acquired by Mastercard in September 2021.

 

Elliptichas four core products in the area of forensics and market surveillance. 'Elliptic Lens' allows for crypto wallet screening to identify the owner of a wallet and its source and destination of assets. 'Elliptic Navigator' is a tool for AML compliance monitoring. 'Elliptic Discovery' allows for due diligence and virtual asset service provider (VASP) tracking to assess financial crime risk when engaging with counterparties. 'Elliptic Investigator' provides cryptocurrency investigations to visualize and explore crypto wallets and transactions.

 

Eventus offers its 'Validus' platform which integrates trade surveillance, market risk, algo monitoring, and AML/transaction monitoring. In addition to its digital asset market coverage, its surveillance products span traditional equities, options, futures, foreign exchange (FX), and fixed- income markets.

 

Nasdaq provides its 'Nasdaq Trade Surveillance' tool for trade monitoring and crime detection. It covers monitoring illicit activities such as layering and spoofing, wash trading, and so-called 'pump and dump' schemes. As early as January 2017, the company had seven digital asset exchanges as customers for its market surveillance product.

 

Solidus Labs helps customers spot and report market manipulation. It also offers an "all-in-one" crypto risk monitoring suite 'Halo' to protect investors from threats in DeFi. It integrates this solution with key market players' offerings to carry out AML, bank account verification, KYC, KYT ('know your transaction'), and wallet screening.

 

TRM Labs has three core products. 'TRM Forensics' allows users to trace the source and destination of crypto transactions. 'TRM Know-Your-VASP' is used for assessing risk for Virtual Asset Service Providers and other crypto businesses. 'TRM Transaction Monitoring' is used for monitoring digital asset deposits and withdrawals for AML/CFT ('Combating the Financing of Terrorism') compliance.

 

Verafin offers an integrated platform that provides tools for AML monitoring, fraud detection, blockchain analytics, risk management, and case management. Verafin was acquired by Nasdaq in 2021.

 

The following subsection provides an overview of data providers' fundraising and M&A activity.

 

 

Fundraising and Investments

Fundraising of digital asset data providers increased significantly between 2020 and the first half of 2022. Chainalysis has led the way with $536.6 million in total funding since its inception in 2014. In 2022, Amberdata ($30 million Series B), Coin Metrics ($35 million Series C), Dune ($69 million Series B), Kaiko ($53 million Series B), and Lukka ($110 million Series E) all raised significant funding.

 

 

TradFi institutional participation in digital asset markets has also risen dramatically over the past two years. Citigroup Inc., Goldman Sachs, Morgan Stanley, and Wells Fargo have invested considerable resources in blockchain and blockchain-adjacent projects, companies, and initiatives. Many of these firms have also invested directly in companies or initiatives that focus on digital asset data provision, for example, Citigroup Inc. with its investment in Amberdata, Wells Fargo with its investment in Elliptic, and Goldman Sachs by partnering with MCSI and Coin Metrics to create a cryptocurrency taxonomy called Datonomy.

 

As established institutions foray into the digital asset space, they naturally look for high-quality data service providers. Chainalysis' size, history, and perceived safety were a factor in GIC's investment in its $170 million Series F funding round in May 2022.

 

"Chainalysis is in a unique position of running a SaaS (software as a service) business in the cryptocurrency space due to the stability of its business model as well as the increasing demand for trust and safety in the overall industry." - Choo Yong Cheen, Chief Investment Officer of Private Equity at GIC, (Series F funding round press release, May 2022)

 

How capital is used in these funding rounds largely depends on the size and strategies of the funded companies. Chainalysis' offerings are fairly established and have thus decided to use this capital to extend the reach of their services into new markets:

 

"We are growing in regions such as Europe and Asia-Pacific. So far up until now, we had basically no presence in South America, so that is another growth area for us.." – Michael Gronager, Chainalysis CEO and Co-Founder, (Company's Series F press release, May 2022).

 

Amberdata also held a funding round in May 2022. Having previously raised $15 million in a Series A led by Citigroup, the firm raised $30 million in its Series B led by Knollwood Investment Advisory. It intends to use this capital to accelerate its expansion and new product initiatives.

 

"This financing will allow us to accelerate the expansion of our worldwide go-to-market activities, scale our industry-leading data infrastructure, and build out our world-class customer success team. It will also allow us to accelerate new product initiatives including the expansion of DeFi depth and coverage, the development of digital asset indices, and market intelligence and risk analytics applications. It is our intent to extend our leadership and continue to define the category for institutional digital asset data and research applications." – Shawn Douglass, CEO of Amberdata, (Series B funding round Press release, May 2022)

 

Mergers and Acquisitions

Significant mergers and acquisitions deals in the data provider space have transpired since last year's data and infrastructure report. Mastercard's acquisition of CipherTrace in September 2021 is an excellent example of a "web2" firm foraying into "web3" by acquiring a crypto-native company. Mastercard is no stranger to digital payments or cybersecurity; the firm has 2.9 billion cards in global circulation and has launched a Crypto Card Program that allows users to spend digital currencies on everyday transactions. CipherTrace is a leading digital asset intelligence and forensics company that has historically provided cybersecurity solutions to large exchanges, banks, and government agencies.

 

"We help companies – whether they are banks or cryptocurrency exchanges, government regulators or law enforcement to keep the crypto economy safe. Our two companies [Mastercard and CipherTrace] share this vision to provide security and trust throughout the ecosystem. We are thrilled to join the Mastercard family to scale CipherTrace's reach across the globe." – Dave Jevans, CEO, CipherTrace (Mastercard Press Release, September 2021)

To expand its capability in monitoring on-chain illicit activity, Chainalysis acquired Excygent, a cybercrime investigation company that provided forensics services to government agencies, in October 2021. Excygent was founded in 2018. Its expertise in cybercrime, open source analysis, and database forensics enables Chainalysis to expand the reach and quality of its offerings in supporting government investigations.

 

"Cybercrime like ransomware is one of the biggest barriers to building trust in cryptocurrency. The expertise brought by the Excygent team directly aligns with our mission to leverage the transparency of blockchains to weed out bad actors from the ecosystem and ultimately promote more financial freedom with less risk." – Michael Gronager, Co-founder and CEO of Chainalysis, (Chainalysis press release, October 2021)

 

Kaiko, a leading market data provider, acquired quantitative analytics firm Kesitys in April 2022 two months prior to its Series B. Kaiko had previously partnered with Kesitys in May 2021 to create quantitative products targeted at cryptocurrency traders and portfolio managers.

 

Amberdata announced its acquisition of Genesis Volatility, a data provider focused on options research and data analytics for financial institutions, in late October 2022. Genesis Volatility's offerings provide current and historical derivatives data from both CEXes and DEXes. Its set of tools is geared towards sophisticated digital asset options traders. This acquisition comes shortly on the heels of Amberdata's $30 million Series B in May 2022. The integration of Genesis Volatility's data analytics capabilities into Amberdata's existing offerings is intended to provide financial institutions with a holistic view of DeFi.

"If you look at TradFi as a roadmap to where crypto is going to go, derivatives rule the world in the rest of financial services. In crypto specifically, options are so important because there are many regulated US entities that are uncomfortable holding crypto, perhaps because of regulatory concerns, or they're worried about getting hacked .... So they're creating structured products and transacting in options because they're comfortable with those and their status as a derivative means that they don't have to deal with custody. Genesis Volatility has built the best analytics platform for vol surfaces, skews, and correlations … it brings us an analytics platform to start to bring our deep insights into DeFi into on-chain markets to provide market intelligence." – Shawn Douglass, CEO of Amberdata, (In an interview with The Block, October 2022)