Project Atlas: mapping the world of decentralised finance

 4 October 2023 (updated 16 October 2023) 

Project Atlas is a collaboration between the BIS Innovation Hub Eurosystem Centre, De Nederlandsche Bank and the Deutsche Bundesbank.

Project Atlas creates a data platform that sheds light on the macroeconomic relevance of cryptoasset markets and decentralised finance (DeFi). A first proof of concept of Project Atlas was developed focusing on international flows of cryptoassets.

Cryptoassets and DeFi applications are part of an emerging financial ecosystem that spans the globe. While introducing new technologies, these markets often lack transparency and potentially present risks to financial stability. The collapse of some stablecoins and DeFi platforms has highlighted the difficulty of making such risk assessments today. Although blockchain transactions are theoretically transparent, reliable information on macro-financial implications is hard to obtain.

Project Atlas provides data tailored to the needs of central banks and financial regulators. It fuses data gathered from crypto exchanges (off-chain data) with data from public blockchains (on-chain data) gathered from nodes. By connecting various sources, Atlas allows for data vetting, giving users tools to evaluate these markets' economic significance more accurately.

As part of a first proof of concept, Project Atlas derives cryptoasset flows across geographical locations. The approach uses transactions attributed to crypto exchanges in the Bitcoin network, along with the location of those exchanges, as a proxy for cross-border capital flows.

The initial findings indicate that, although relatively small compared with total on-chain network traffic, identified flows between crypto exchanges are significant and substantial economically. Attributing geographical areas to exchanges (where possible) lays out the structure of cross-border flows. Thus, Project Atlas provides a starting point for structural analysis across jurisdictions.

By providing greater insights into DeFi and crypto markets, starting with a better understanding of the data and technologies used in the industry, Project Atlas will aid policymakers and enhance central banks' analytical and technical capabilities as well as their overall understanding of the underlying technology.