Treasury proposal for renewal of API licenses for Blockexplorers

Proponent/Beneficiary: 16Hw2qwttttQ8tMCPLwnX3wegtsaTYD9gGakKbAHDb9PW3g5 | Merkle Science

Date: 6.06.2024

Requested amount: $43,200 | 6702 DOT (calculated with EMA-7 DOT price $7.09, with 10% buffer to account for volatility)

Summary:
This proposal seeks funding for 4 API licenses from Merkle Science, to be used by Subscan, Fearless, PolkaGate, and Subwallet in order to display account attributions, assigned by Merkle Science, to their users.

In November 2021, Merkle Science, a blockchain analytics provider, was funded by the treasury to onboard Polkadot to their tools and infrastructure. Besides the development costs, this proposal covered a one-year license to their tools for the Anti-Scam Team, in order to assist scam victims by efficiently tracking stolen funds. It also accounted for 5 one-year API licenses for block explorers and wallets to access their address attributions and display that information to users.

Although the development took longer than expected, in December 2022 the investigation tools were fully production-ready for the Anti-Scam Team to use them, and that marked the beginning of that one-year license. In their recent bounty top-up proposal, the Anti-Scam Team has included the cost of the renewal of that license, so they can continue to use these tools.

The one-year licenses for the use of their API began on May 30, 2023. The reason was that additional development work was needed to account for the unique use case of block explorers and wallets consuming and disseminating that information to their users. From the 5 licenses originally included in the proposal, 4 of them were actually used by Subscan, Polkaholic, Fearless, and PolkaGate. Various reasons prevented the 5th license from being provided to another team, and Polkaholic block explorer has since ceased its operations, so currently 3 of the licenses are being used.

Since these licenses will officially expire at the end of May 2024 (but will be extended for one month to ensure continuity of the service), this proposal aims to secure funding for their renewal for another year, as well as provide a new license to Subwallet, who have expressed interest in adding this feature to their apps.

The cost of each license is $10,800 USD, so the requested amount for all 4 licenses is $43200 (which includes a 30% discount on individual licenses prices). With an EMA-7 DOT price of $7.09 USD, this amounts to a request of 6093 DOT, including a 10% (609 DOT) buffer to account for volatility. Total DOT requested 6702. Any unused funds from this buffer will be returned to the Treasury.

The license provides API access to each team to Merkle Science’s database of address attributions that contain more than 1,047,277 entries at the time of writing.

Donation 4
Exchanges 1,041,597
High Risk Organization 3,264
Law Enforcement 2
Malware 4
Mining Pool 2
Sanctions 24
Scam 128
Service 2,246
Theft 6

It allows for 10,000 queries per year, which are more than enough to cover their needs.

We strongly believe that this feature is beneficial to all Polkadot users and should continue to exist for many reasons:

It protects users from accidentally sending funds to known scam addresses or directly to exchange hot wallets. Both of these actions could lead to loss of funds.
It provides more transparency to on-chain activity.
It allows users to better follow their transaction history, since they can easily identify interactions with known entities (like exchanges).
It helps institutions and individual users to avoid interacting with accounts in sanctions lists.

We hope that you will find continuing to provide this service to the Polkadot community beneficial and upvote this proposal. We remain at the community’s disposal to answer any questions and receive your feedback.

Below are some examples of how these attributions are displayed in Subscan, PolkaGate, and Fearless today.

Subscan

PolkaGate

Fearless