We don’t mean between two crypto addresses; we mean between _The ability to see who your prospect has traded with and why enables not just the discovery of how wealth was accrued, but whether their wealth story adds up. Being able to examine fund flows with their counterparties is critical in getting to grips with the overall narrative. Often this means being able to answer questions like:
Which Uniswap pools are they using and why?**
- **How frequent are the deposits to a staking protocol, and what have they earned from it?
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These are all valid focus points when assessing someone’s crypto activity. Its critical to get comfortable with the story by validating their on-chain activity. Onboarding crypto customers in this way will also open up other opportunities that previously were not there.
On-Chain Counterparty Analysis**
Let’s take a look at how this works in practice, starting with a Bitcoin address (below). The address lists Luno, Xapo, CEX.IO, and Cubits as its known direct sources of funds. You can see the amount received and the value of that amount per source, plus the timeframes during which the address traded with those counterparties - all important information for source of funds verification.
Users can toggle by ‘Source’, ‘Destination’, or ‘All’ on this pop-up. We’ve selected the latter which shows all deposits and withdrawals with Luno addresses._
So next we might turn to destinations of funds to learn more about where BTC is going to. As we know, one transfer was sent back to Luno, but funds have also gone to other services.
**One of the critical points of this analysis is to confirm funds flowing into and out of the ecosystem. Fiat investments and withdrawals are mostly done via exchanges (so-called ‘on-ramps’ or ‘off-ramps’). Matching BTC deposits to exchanges that the prospect has highlighted as an ‘off-ramp’ may point to where funds have exited the ecosystem. Bitstamp (above) might be an off-ramp in this case.
**A good example of the flow of funds on Ethereum can be seen in the image below which shows trades between an unknown address and a liquidity pool on Curve, a popular DeFi protocol. This pool specialises in stablecoins, allowing users to deposit and withdraw DAI, USDT, and USDC. We can see how this address has used the pool over time to swap tokens.
All of these tables are automatically sorted in chronological order, making it far easier to see the order of transfers, including what assets were swapped and when.
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