What Is Arkham Intelligence?
Arkham Intelligence is a platform that provides information on the real world entities behind addresses on the blockchain. It uses artificial intelligence to process, classify, and display a range of on-chain data around tokens and entities to enable users to identify patterns and trace transactions, while providing an overview of inflows and outflows.
Key Takeaways
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Blockchains offer unparalleled transparency but suffer from data complexity, making it challenging for average users to comprehend transaction data.
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Arkham Intelligence is an on-chain analytics platform aimed at simplifying blockchain data by converting raw, cryptic data into human-readable formats and linking pseudonymous addresses to real-world identities.
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Arkham uses engineering, data science, and machine learning to classify and continually refine data.
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Arkham Intelligence is powered by its native token, ARKM, which is used to on the Intel Exchange to buy and sell data on the platform.
Among a blockchain’s many great features, one of its most celebrated could arguably be its inherent transparency. Every perceptible interaction in a decentralized and cryptographically secure environment is a transaction etched on the distributed ledger. This transparency has heralded a new era in finance and technology, promising accountability, traceability, and a decreased likelihood of corruption.
The openness of the distributed ledger implies that anyone can deep dive into any and all transactions that have ever occurred from the genesis of the first block on that chain.
But how often do you see or hear of the average crypto user actually digging into the millions of transactions on a blockchain one by one? Rarely, if ever.
The reason is likely because most of the data on a blockchain is computer mumbo-jumbo that gives a headache to anyone attempting to make sense of it all. We need a tool that could take all of this data and present it in a human-readable format.
In this article, we will explore Arkham Intelligence, its native token Arkham (ARKM), how to use it, and what it brings to the crypto space.
Introduction to Arkham Intelligence
Arkham Intelligence is an on-chain analytics platform that tries to solve the dichotomy of data transparency and data complexity in blockchains by providing a suite of tools for anyone to dig deep into the information available on supported blockchains.
According to the CEO, one of the major focuses of the company is to enable traders with access to better intelligence to make investment decisions.
“The main customer of Arkham is traders. It's hedge funds. It's people making money off of information about who's buying and selling large positions of a particular token”
- Arkham CEO Miguel Morel
Different traders use different information to transact in the market. These information types are mainly:
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Asset fundamentals: This involves fundamental analysis of the project or company
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Price data: This involves the historical price movement of an asset to estimate future performance
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Transaction data: This involves the movement of funds on the distributed ledger and plays a significant role in swaying the market
Even policymakers, regulators, and security experts rely on this data to ensure fair operations and mitigate threats from bad actors.
Arkham Intelligence focuses on transaction data. While blockchains are transparent, their transaction data, such as entities and volumes, are hidden behind garbled hexadecimal digits and lengthy ledgers. So, pseudonymity becomes an innate feature of blockchains, where organizations and individuals can operate as just numbers on a screen or ENS addresses.
This means that while you can see wallet addresses and their activities, connecting them to actual individuals or organizations can be challenging. So, even if someone were able to interpret the raw data, understanding the broader context or the "why" behind transactions remains elusive.
Credits: Arkham Intelligence
Arkham Intelligence aims to make the transaction data usable by all and make cryptocurrency a level playing field through information democratization.
It shines a light on the vast web of transactional activities to bridge the gap between analysts using advanced software algorithms and the rest of the world.
How Does Arkham Intelligence Work?
Credits: Sankrit
The first step for Arkham Intelligence is to collect on-chain and off-chain data that may or may not be linked to real-world identities, including pseudonymous addresses, transaction histories, and specifics of smart contract codes.
Next, the task is to turn this raw data into usable data. Arkham does this by blending engineering expertise, data science, and machine learning to classify the pseudonymous data into "entities."
The platform looks at various data points and gathers intel from multiple sources to identify individuals, organizations, and other entities. This classification is further refined with the help of machine learning heuristics.
In plain English, machine learning heuristics are algorithms that allow the platform to learn more about something through pattern recognition — this helps in matching the pseudonymous entities to real-world counterparts while getting incrementally better in the process.
Finally, the company provides an intuitive front-end dashboard for users where all the consolidated data can be queried, scrutinized, and analyzed almost instantaneously.
Core Features of Arkham Intelligence
Since its inception, Arkham has introduced several features that make it stand out as a one-stop solution for deanonymizing the blockchain.
Below are a few of them:
Arkham Dashboard
Credits: Arkham Intelligence
The Arkham Dashboard is the nexus of bespoke user experience on Arkham Intelligence.
It is not a one-for-all type of feature; instead, it allows users to customize the entire experience that is unique to their requirements. You can cherry-pick the metrics you want to keep an eye on, and the simple drag-and-drop interface lets you design a view unique to you.
Arkham Intel Exchange
Credits: Arkham Intelligence
The Arkham Intel Exchange marketplace is a crucial pillar that aids in Arkham’s mission of deanonymizing the blockchain.
The marketplace is built to be the perfect recipe to incentivize users to actively participate and provide information that would connect real-world identities and pseudonymous wallet addresses.
Here, users can place bounties to dox an address or entity. The community can then, by adhering to the platform’s marketplace rules, attempt to provide information/proof tying the address to a real-world entity. At time of writing, the highest bounty available is over 100K ARKM (~$33.5K) for identifying an individual or entity behind the hack that took place during the FTX collapse in November 2022 that resulted in a loss of over $415M in cryptocurrency.
The Intel Exchange was dubbed “Snitch-to-Earn” by critics of the feature who thought it to be detrimental to the crypto ecosystem. That said, the rules of the marketplace include not asking for information that is not already publicly available.
Arkham Visualizer
Credits: Arkham Intelligence
The Arkham Visualizer is a flashy yet functional feature of the platform for those who want a bird's eye view of an entity’s on-chain data and narrow their research from there.
The visualizer takes the raw data and portrays it as a web of transactions interconnected by significant data points. This goes a long way in helping users recognize patterns, trace transactions, understand relationships among entities, and, in general, get a holistic overview of inflows and outflows.
This feature is great for those who want to do away with a list view and instead prefer a more visual approach to understanding the dynamics of any entity’s assets. It can also be used to visualize the web of transactions for a specific token, as covered below.
Arkham Token Pages
Credits: Arkham Intelligence
Arkham Token Pages provide users with a general overview of the token, along with information like top holders, transactions, and also the highest inflows and outflows over a time period. To dig further into the data, users can filter transactions based on addresses, volume, and more.
Furthermore, you can click on the “Visualize” button to open the Arkham Visualizer for the particular token to see the web of transactions.
Arkham Private Labels
Credits: Arkham Intelligence
The Arkham Private Labels feature is centered around personalization for users. Here, users can add entities based on wallet addresses and tag them with specific labels to be recognized easily for tracking and analysis.
The ability to cluster multiple addresses into a category or individual labels empowers users to curate their own feed of on-chain analysis. By labeling addresses, users essentially add context to addresses, making it easier for them to perform an analysis.
More importantly, these labels are private. So, they are visible only to you and not to other Arkham users.
Arkham Oracle
Credits: Arkham Intelligence
The Arkham Oracle takes on-chain analysis a step further with the help of Artificial Intelligence.
The oracle uses AI to process natural language input and provide exactly what you want about data on the blockchain.
It is a chatbot that functions like a personal AI assistant for on-chain analysis – as seen above, it can pull up information around specific entities, such as the current balance of their holdings. While it can provide information around entities, it is likely best used to track token holdings of entities in the crypto space.
How to Use Arkham Intelligence?
Arkham's multi-faceted features open up a range of use cases for both individuals and professionals.
Here’s a look at how you can use Arkham Intelligence.
Monitoring Your Wallets
Credits: Sankrit
It is common for users to have multiple wallets. Chances are that you, too, have at least two wallets — a hot wallet for frequent transactions and a cold wallet where you HODL a large chunk of investments.
Things can quickly get out of hand when you begin using more wallets — particularly if the blockchain is new and is not supported by popular wallets, or if the wallets you are using do not support multiple chains.
In this case, you can use the Arkham Private Labels features to input your wallet address and tag them as “Primary,” “Personal,” “Business,” etc., so you will have complete clarity on what is happening inside your wallets.
Business Analysis
Credits: Sankrit
Tracking and analytics are the backbone of BI professionals’ workflow. If a company is adopting cryptocurrency in any form, it becomes crucial to set up proper tracking and reporting practices on things like balances, inflows, and outflows.
However, tracking on-chain activity through block explorers and other conventional methods is tedious.
Business analysts can use the Arkham Visualizer feature to get a bird’s eye view of all transactions done by the wallet linked to the business. They can then use this to provide quick overview reports to stakeholders.
Analysts can even diver deeper when they spot anomalies in transactions. For example, sending funds to an entity that is not affiliated with the business would be considered an anomaly that warrants further investigation on the business's part.
Copy Trading
Credits: Sankrit
For novice traders, copy trading presents an opportunity to execute the same trades as full-time crypto traders.
Copy trading is a strategy where the trader executes the same trade (which might differ in proportionality) as another trader by actively watching over their transactions.
If you know anyone who is adept at trading on DEXs, and you also know their wallet address, then you can tag that wallet address on your Private Labels dashboard and keep an eye on every transaction they are executing so that you, too, can do the same within your capacity.
Note that even copy trading entails significant risks, and your risk tolerance may differ from the entity you are copying. So, always do your due diligence before investing.
Controversy Around Arkham Intelligence
Arkham Intelligence promises to deanonymize the blockchain, and one of its means of doing so is the introduction of the Arkham Intel Exchange marketplace.
Identifying the real world entity behind a wallet address is a crucial first step. It is often difficult to do this with just on-chain data. Correlating off-chain data and on-chain data is even more difficult when you don’t know what you’re exactly looking for.
The Arkham Intel Exchange marketplace made this easier by adding an incentive layer to doxing identities. Here, the task of correlating publicly available off-chain data and on-chain data can be crowdsourced by placing ‘intel bounties.'
This riled up the crypto community as they were not keen on having their portfolios and entire financial history be looked up as easily as typing their name in the search bar.
As a result, the marketplace feature of Arkham Intelligece was dubbed “Dox-to-Earn", with critics pointing out the possibility of misidentification, or the potential of revealing the identities of regular people who might prefer to keep their crypto investments private.
Other features we're adding to our dox-to-earn program soon:
— poordart (@poordart) July 10, 2023
- Wallet owner physical address
- Telephone number, email
- Social security number
- Family background, children's kindergarten location and many other identifying information!
All in a single app! https://t.co/9IgptuNpRv pic.twitter.com/Fbg6S8QJBV
However, from Arkham's CEO's perspective, most blockchains currently operate with a clear lack of privacy, as wallet addresses used in crypto transactions can be viewed by anyone over the internet.
“Publicly available blockchains are probably the worst possible way of keeping one's private information private... You are literally making transactions which you are broadcasting to a decentralized network of millions of people, all of whom can look on-chain in order to see which transactions are being broadcast.”
What Is ARKM?
Tying all of this together and powering the Arkham Intel Exchange Marketplace is Arkham Intelligence’s native token, Arkham (ARKM). ARKM is used on the Arkham Intel Exchange, where anyone can trade ARKM for information such as enttity labels, hacker tracing and curated data feeds. Information buyers can request information by placing bounties, while sellers can offer intelligence through auctions.
There are also additional ARKM rewards, such as discounts, where users receive up to 50% discounts for holding ARKM based on their holding size and duration. They can also receive 20% for platform payments made in ARKM.
ARKM is an ERC-20 token. It was launched on Binance via the Binance Launchpad at a price of about $0.05 or 0.00020576 BNB. The launch was a brilliant success, with the token being oversubscribed by 9,900% and its value reaching $0.79 by 18 July 2023.
Since then, the token has been on a decline and is trading around the $0.4 mark as of 1 September 2023.
Learn more about Arkham tokenomics here.
Conclusion
As the world becomes more digital, the need for more transparency, better accountability, and improved security is apparent.
Blockchains and cryptocurrencies have emerged as potential solutions to this by distributing control over financial networks, improving traceability of malicious transactions, and mitigating risks through programmable money.
However, the gap between data comprehensibility and data availability is palpable. This is far from ideal.
Arkham Intelligence’s approach to bridging the gap between the two by deanonymizing the blockchain for everyday users could finally put complex on-chain analysis within the reach of individuals.
This article is for educational purposes only and should not be taken as financial advice.
Sankrit is a content writer and a subject matter expert in web3. He has worked with notable companies, including Ledger, Alchemy, and MoonPay. Sankrit specializes in helping web3 brands create content that is easy to understand while accurately explaining technical concepts.
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