OnChainScore – Coinbase’s Wallet Scoring System: A Tool for Evaluating User Reputation

Summary: Hi everyone, recently, Brian Armstrong, CEO of Coinbase, has launched OnChainScore, a wallet scoring platform based on blockchain activity. This platform displays details such as the number of transactions, activity frequency, and interaction level of wallets on Ethereum and Base. It will eventually support ENS and Basenames. This system can play a significant role in meeting anti-money laundering (AML) and know your customer (KYC) regulations, while also benefiting investors, cryptocurrency trading platforms, and even promoting the development of decentralized applications (DApps).

OnChainScore: Wallet Scoring based on Blockchain Activity

Brian Armstrong, Coinbase’s CEO, announced a new platform called OnChainScore. This platform allows users to check the score of any wallet address based on its activity on the blockchain.

OnChainScore provides detailed information such as:

• Number of transactions: How many transactions has the wallet made in the past?
• Activity frequency: Is the wallet active regularly?
• Interaction level: Does the wallet interact with smart contracts, trade NFTs, or participate in DeFi activities?

In the future, this platform plans to expand its support to ENS and Basenames domains.

It can be seen that OnChainScore is not just a scoring system, but also a tool for analyzing on-chain activity. It provides an overview of the history and activity level of a cryptocurrency wallet.

Benefits of OnChainScore

OnChainScore offers benefits to various stakeholders in the cryptocurrency market:

1. For platforms:

• Regulatory Compliance Support: The wallet scoring system can help meet anti-money laundering (AML) and know your customer (KYC) regulations. Platforms can use this score to screen high-risk addresses and block transactions from them.
• Enhanced Security: The scoring system can help platforms detect unusual activities, such as newly created wallets for fraudulent purposes, addresses related to money laundering activities, or suspicious wallet activity.

2. For investors:

• Risk Assessment: The scoring system can help investors assess the risk level of a cryptocurrency wallet. This helps them avoid transactions with suspicious wallets, reducing the risk of fraud or scams.
• Increased Confidence: The scoring system can help investors identify reputable and trustworthy wallets, increasing confidence in their transactions.

3. For DApp developers:

• User Screening: Developers can use wallet scores to identify and screen trustworthy users, building a high-quality user community for their DApps.
• Enhanced Interactivity: Developers can integrate the scoring system into their DApps, allowing users to interact with applications based on their trust levels.

The use of cryptocurrency wallet scores can open up new opportunities for businesses and individuals in the cryptocurrency industry, such as creating insurance services based on wallet scores or providing credit based on wallet scores.

OnChainScore not only benefits platforms and investors but also contributes to the future development of decentralized applications (DApps).

According to Click Digital, the launch of OnChainScore is a positive move for the entire crypto industry, enhancing the transparency and trustworthiness of the market.

Table Summarizing the Advantages and Disadvantages of OnChainScore

Feature	Advantage	Disadvantage
Scoring System	Transparent and based on blockchain data	Can be manipulated by fraudulent or spam activities
Benefits for platforms	Support regulatory compliance, enhanced security	Requires platforms to integrate the system, which can be challenging or costly
Benefits for investors	Helps assess risks, increases confidence	The score is not the only factor in evaluating a cryptocurrency wallet
Benefits for DApps	Builds a trusted community, enhances interactivity	Requires DApp developers to integrate the system, which can be challenging or costly
Future	Potential to change the way the cryptocurrency market works, promoting DApp development	Needs time to become widespread and trusted by the community

Note: This table is an example. You can adjust the content and add other items based on your needs.

The Future of OnChainScore

OnChainScore has the potential to change how the crypto market operates.

• Building Trust: Wallet scores can be used to build on-chain trust, influencing how users interact with decentralized applications and services. A high score indicates a trustworthy user, while a low score may indicate risk.
• Boosting Confidence: In a world where trust is decentralized and every interaction is recorded on the chain, wallet scores can play a vital role in building trust.
• Developing Decentralized Applications: OnChainScore can be integrated into DApps to allow users to interact with applications based on their trust levels, promoting the development of the DApp ecosystem.

In the future, OnChainScore may undergo the following changes:

• Expanding to More Chains: OnChainScore currently supports Ethereum and Base but is expected to expand to support more blockchains in the future.
• Adding More Features: Coinbase is developing more features for OnChainScore, including the ability to display wallet transaction history, analyze activities related to NFTs and DeFi, and provide scores for wallets on various other blockchain networks.

Conclusion

OnChainScore is a significant step in building trust and transparency in the crypto market. This system has the potential to change how we interact with cryptocurrencies, from risk management to building trust and promoting the development of decentralized applications. Let’s see how OnChainScore will develop in the future.

What do you think about OnChainScore? Share your thoughts in the comments below.