11 min read

bitsCrunch: The Data Analytics & Forensics Protocol

Empowering Transparency

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Published on

17 Apr, 2024


The bitsCrunch network is a decentralized, AI-enhanced data platform that provides unmatched, comprehensive analytics and forensics tools for NFTs and their marketplaces.

Raw blockchain data is not human-readable, so tools and protocols have been developed to make it understandable. bitsCrunch wants to democratize access to blockchain data, making it available for individuals and enterprise-level users. Furthermore, bitsCrunch makes all this comprehensive data accessible through user-friendly APIs.

For starters, bitsCrunch raised over $12 million from top Web3 investors, such as Polygon Ventures, Coinbase Ventures, Animoca Brands, and Chainlink Labs. It also has top-shelf partners, including Mastercard, DappRadar, and Unstoppable Domains.

The project's founder and CEO, Vijay Pravin, is a data expert. He and the team want the bitsCrunch network to herald a new era in blockchain analytics.

bitsCrunch Use Cases

As an NFT analytics platform, bitsCrunch provides in-depth data analytics for digital assets in the NFT space. It's also an NFT lending protocol and provides fraud detection with an alert system, among other things. Although it can provide analytics in Web3 gaming, digital marketplaces, and brands, this article will focus primarily on NFTs.

NFT Analytics and Wash Trading

While NFTs' popularity is a net positive, their accelerated growth has attracted more than its fair share of scammers. Bad actors leverage their blockchain knowledge to perform nefarious activities like wash trading.

Wash trading occurs when the seller is on both sides of the trade. The seller sells the NFT to a new wallet that the original owner controls. The process can be relatively easy since many NFT trading platforms let users trade by simply connecting their wallet to the platform with no way to identify them.

It's done to misrepresent an NFT, making it appear more valuable than it is. The point is to artificially increase trading volume or NFT prices to lure buyers into a faux-buying spree.

Users can be hard-pressed to detect these malicious practices when the excitement of price surges kicks in. However, with blockchain analysis, NFT wash trading can be tracked by analyzing sales of NFTs to self-financed addresses.

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Other NFT Risks

Some of the other NFT risks include phishing attacks, fakes, and misleading metadata. Users and marketplaces alike struggle with such fraudulent activities that jeopardize their investments.

Digital art forgery occurs when malefactors steal and profit from another creator's work. These bad actors can easily duplicate digital art and mint it as a new NFT. This practice damages the creator's reputation and the NFT marketplace, reducing NFT values.

Furthermore, marketplace statistics about their platform's growth must be more reliable because collectors and traders need accurate information to make informed decisions.

Because of these challenges, neither the creator nor the collector knows the fair price for a given NFT. Furthermore, the burgeoning NFT market presents challenges for analytics projects. Keeping up with legitimate rapid innovation and transaction complexity is also tricky.

The bitsCrunch Solution

After evaluating these challenges, bitsCrunch's desire to revolutionize NFT analytics and help its users better understand NFT trade volumes and current valuations is unsurprising.

bitsCrunch provides an enriched data network, fostered by community contributions, that mirrors the latest developments in the NFT space. With this kind of data, analytics platforms can concentrate on their core competencies, like deriving and delivering valuable insights for their clients, rather than being tied down to data collection and cleaning.

Further, NFT analytics projects can better navigate the complex world of blockchain data analysis by providing their users with up-to-date insights. bitsCrunch's robust data infrastructure can revolutionize these projects' operations in this ever-evolving space.

In other words, NFT analytics projects can utilize the bitsCrunch network to stay ahead of the rapidly evolving NFT markets. With accurate real-time data flows, users can be assured of timely insights that reveal the latest industry trends and patterns.

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Beating Fraud with Detection and Alerts

bitsCrunch addresses fraud challenges by providing a detection and alerting mechanism. The inbuilt fraud detection and alerting system addresses the problematic issue of NFT fraud.

This mechanism allows projects to review data about potential fraud and set up alerts and notifications to quickly identify and respond to potential threats to protect their platform and users. With quick response times to possible fraud incidents, bitsCrunch makes NFT transactions safer.

Preventive measures such as NFT fraud education and increased transparency for NFT marketplaces can also make a difference. bitsCrunch builds user trust by upgrading NFT transactions' security, authenticity, and legitimacy.

Notably, bitsCrunch is user-friendly. All it takes to access its data APIs is an internet connection and an API key; after users get access, they can begin querying data, making API calls, and building their dashboards.

bitsCrunch Recent News

In a recent tweet, bitsCrunch announced expanded support for the Solana blockchain. It has empowered Solana with NFT Price Estimation and IP Infringement Detection and claims it dives deeper into sophisticated digital asset forensics than any other project.

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bitsCrunch has comprehensively indexed all 255 million Solana blocks. Furthermore, its AI is analyzing 276 billion transactions and over 129 terabytes of data. The Solana ecosystem's use cases include in-depth analytics and forensics for digital assets in NFT Marketplaces, aggregators, and lending protocols.

The Contributor Role

In the decentralized world of Web3, community involvement is more than just a buzzword. A collaborative ecosystem thrives on shared information and continuous learning, which is what bitsCrunch intends to build.

Thus, bitsCrunch is moving toward DAO status by launching its Contributor role. This program allows community members to participate in the network's development and earn rewards for their contributions. Users can contribute code or content to help enhance the network's capabilities.

The Contributor role is multi-dimensional, ranging from content enrichment to more advanced contributions like coding or building AI models, and it will evolve.

Initially, Contributors can propose metadata for NFT collections, DeFi contracts, and other smart contracts. They can also help organize and categorize NFT collections and maintain their social media data, ensuring accuracy.

The first opportunity is "asset labeling," which lets users identify wallet types and their origins. The labels are verified internally, and Contributors are rewarded on-chain.

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Peer Review Process

When a Contributor submits a proposal—for example, updating a social media link or labeling a wallet address—the proposal enters a peer review process. This process involves a comprehensive evaluation by fellow community Contributors randomly selected to ensure no bias.

At least three independent reviewers examine each proposal to assess its accuracy. This inspection process eliminates a single point of failure from poisoning the data's quality.

bitsCrunch also uses a review council that acts as the network guardian. The council is composed of the bitsCrunch team and will eventually include community members. It intervenes when a proposal is flagged for innocent inaccuracies or intentional misinformation insertion.

The number of proposals each contributor can make is limited to ensure no individual becomes too influential on the network.

Consequences for Bad Actors

The temptation for bad actors can be strong, so bitsCrunch has established clear consequences for malicious actions.

The worst offenses should trigger a slashing mechanism against the contributor's stake. In some cases, the protocol can withhold part of the incentive rewards to be issued, but this does not apply to already-paid incentives.

The protocol may also temporarily ban the culprit from making new proposals to ensure that the integrity of bitsCrunch's data is not compromised.

bitsCrunch Contributor Rewards

While penalties may be necessary to discourage malicious behavior, the goal is to foster a positive environment. Contributors can, therefore, dispute rejected proposals to ensure the accused have a voice and that the system remains fair.

In addition, rewards are vital for motivating contributors to propel network growth. The goal is to balance contributor effort with incentives. The diagram shows the various reward pools for different roles within the bitsCrunch network.

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The allocation for content Contributors is 4.8 million BCUT annually. This amount equals 400,000 BCUT monthly. This allocation serves two key objectives:

  1. It encourages sustained engagement within the network.

  2. It aligns Contributors' objectives with the network's long-term success.

The following diagram shows the distribution of the network-generated fees between Operators, Contributors, and Indicators.

Contributors will receive a 10% share of the network's revenue for their content. This distribution will be contingent upon ongoing engagement with the network and proportional to the quality and volume of contributed work. Additionally, the royalties will be divided between content and code Contributors to ensure a fair reward system.

The incentive system is a catalyst for network expansion to accomplish the following:

  1. Attract Top Contributors:

A robust reward mechanism attracts talent to the network.

  1. Building a Dynamic, Collaborative Community:

Incentives cultivate an active, innovative, collaborative community.

  1. Long-Term Commitment:

Aligning incentives with long-term objectives helps Contributors remain invested in the bitsCrunch success.

  1. Building a Stable Ecosystem:

The incentive structure balances token supply and demand to ensure the health and security of the network.

The Indicator Role

Signaling mechanisms inform participants about which blockchains to index and which data needs cleaning, among other tasks. bitsCrunch users can participate in this process as "Indicators." Indicators influence which blockchains or metrics they want to use and are rewarded with a share of the query fees.

This collaborative system of Contributors and Indicators will help advance the NFT analytics landscape.

Bitscrunch 6.png

DPoS - Delegated Proof of Stake

bitsCrunch founder Vijay Pravin stated that existing data protocols like Covalent and Graph Protocol typically follow Delegated Proof of Stake (DPoS) consensus mechanisms. Therefore, bitsCrunch chose that solution to avoid reinventing the wheel. With a workable solution already in place that's been tested, the company decided to focus on its core competencies—data analytics and AI—rather than spending time customizing a consensus mechanism. Hence, the bitsCrunch network relies on node operators.

bitsCrunch and BCUT Staking

The bitsCrunch Mainnet is live, following its BCUT token listing, which marks a significant milestone for the project.

Further, the BCUT holders can choose the best-valued node operators and then delegate their tokens to them. Network participants bonded over 4 million BCUT tokens on the bitsCrunch mainnet in one month alone. Forty-eight leading node operators, including Luganodes, the second largest validator, already contributing to the network.

BCUT tokens allow holders to earn rewards by delegating them to node operators, which is crucial in strengthening the network's security. Participants who delegate their tokens contribute to the network's decentralization, making bitsCrunch more resistant to attacks and manipulation.

Furthermore, when they delegate BCUT, their rewards are staked and grow over time through compounding. Below is the projected APY for 2024:

March: APY was 100%

April: APY of 50%

May: APY of 25%

Afterwards, APY transitions back to the standard 15% to 20%.

When delegators stake their tokens, they contribute to the network's growth and stability, aligning their interests with the bitsCrunch network's success.

Three-Tiered Rewards for bitsCrunch Delegators

Delegators must keep a minimum amount of 500 BCUT on the network. Rewards are divided between three tiers depending on the amount delegated:

Tier 1: 20,000+ BCUT delegated.

Ten delegators (selected randomly) each receive 3,000 BCUT.

Tier 2: Between 5,000 and 20,000 BCUT delegated.

Twenty delegators (selected randomly) each receive 1,000 BCUT.

Tier 3: Between 500 and 5,000 BCUT delegated.

Forty delegators (selected randomly) each receive 250 BCUT.

Everyone is encouraged to participate in delegation and contribute to the bitsCrunch network.


bitsCrunch's AI-driven network brings innovative blockchain analytics and digital assets forensics capabilities to the Web3 ecosystem. While initially focusing on NFTs, the goal is to increase the scope of cryptocurrencies across the blockchain ecosystem to other segments like wallets, DeFi, and GameFi.

The team is working on differentiating bitsCrunch from its competition by adding forensic analysis to traditional analytics. This involves going beyond focusing on NFTs to identifying suspicious activity around the blockchain.

Additionally, bitsCrunch can provide data for in-game asset trading and player behavior by offering deeper insights into in-game analytics. These insights are precious to gaming companies looking to understand audience behavior.

To summarize, bitsCrunch seeks to be a comprehensive data hub for all things blockchain. Offering a glimpse of things to come, Pravin mentioned some major blockchains, potential exchange listings, the transition to a more decentralized operator model, and plans to make the UX easier for non-tech people. This could include added capabilities like interfaces with drag-and-drop features. He's also clarified that bitsCrunch is more interested in slow and steady growth than short-term hype that leads to short-term thinking.

If you hold the BCUT token, you can enhance your portfolio by staking to earn rewards. Leverage Luganodes' institutional-grade infrastructure to stake your holdings and create a passive income. Staking with us ensures ease of use, support, and safety while you earn, and also contribute to the security of the bitsCrunch chain.

Learn how to stake BCUT tokens using this guide. You can learn more about staking on our website, and feel free to contact us for any queries!

About Luganodes

Luganodes is a world-class, Swiss-operated, non-custodial blockchain infrastructure provider that has rapidly gained recognition in the industry for offering institutional-grade services. It was born out of the Lugano Plan B Program, an initiative driven by Tether and the City of Lugano. Luganodes maintains an exceptional 99.9% uptime with round-the-clock monitoring by SRE experts. With support for 40+ PoS networks, it ranks among the top validators on Polygon, Polkadot, Sui, and Tron. Luganodes prioritizes security and compliance, holding the distinction of being one of the first staking providers to adhere to all SOC 2 Type II, GDPR, and ISO 27001 standards as well as offering Chainproof insurance to institutional clients.

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