Håkon Åmdal

Some of the most valuable facts about onchain money aren’t onchain. Which partner issued a unit of a stablecoin, where a deposit originated, whether funds ever touched a sanctioned address… none of that is written into the transfer.

You can reconstruct these facts, but only by replaying every event in exact order while carrying state for millions of addresses.

, our open-source runtime, shows how to solve this with a stateful streaming pipeline. An ordered, reorg-aware source feeds a transform that attaches a label at its source, propagates it through every transfer, and maintains a labeled balance for every address. Goldsky provides the ordered, integrity-checked datasets and managed 

, but the technique generalizes to source of funds, compliance, cost basis, and many other forms of digital asset lineage.

Digital asset lineage is the complete history of where a unit of onchain value originated, how it moved, and what additional context remained attached to it over time.

The idea is that you can attach or “tag” additional data to money that the blockchain doesn’t natively record, creating a programmable layer of context that stays attached as the tokens or money continue to be transferred.

 (outside a blockchain), like who put a stablecoin into circulation. Or it might be 

 (but isn’t available as a first-class queryable API), like whether funds trace back to a sanctioned wallet or which bridge they entered through.

A blockchain is excellent at being a ledger. Every transfer records things like:

. They don’t preserve the business or operational context surrounding that value as it moves through the system.

The chain records the movement. Digital asset lineage preserves the meaning.

If you've worked with data pipelines, “data lineage” is the same concept – tracking where a piece of data originated and how it changed as it moved through a system. Digital asset lineage is the same principle applied to onchain money.

Financial systems need more than a transfer history.

A stablecoin issuer needs to know which partner originally put a unit of supply into circulation. A treasury team needs to preserve cost basis and track AUM as assets move between wallets. A compliance team needs to understand whether funds previously interacted with sanctioned or high-risk addresses.

 understanding where value originated and what happened to it before it reached its current owner.

This is becomes especially important when onchain assets enter systems that need more context than a wallet balance: stablecoin programs, exchanges, banks, custodians, payment companies, treasury teams, and RWA or tokenized asset platforms.

For them, the question isn’t only “did a transfer happen?” It’s also “what are we actually receiving?”

That’s information a blockchain doesn’t preserve on its own.

A separate system has to reconstruct it by carrying state across every transfer.

Digital asset lineage turns raw blockchain transfers into information that onchain finance and TradFi (traditional financial) systems can operate on.

How is digital asset lineage different from wallet labels and blockchain analytics?

Blockchain analytics is the broader category of tools and techniques used to turn raw onchain activity into interpretable context. That can include identifying wallets, detecting patterns, scoring risk, tracing funds, address clustering, fund-flow analysis, and more.

Wallet labels and digital asset lineage are two pieces of that larger analytics stack, but they answer different questions.

Tools like Nansen, Arkham, and Etherscan label 

. After all, tokens get used and transferred. When labeled money leaves a wallet, the label leaves with it. It splits when the money splits. It attaches to whoever receives it.

Forensics tools like Chainalysis and Elliptic do both, which is why the two concepts get conflated. They label a source wallet (identity, fixed to the address) and then trace where its funds went (lineage, traveling with the money). When Elliptic flagged the Bybit thief's wallets in 2025, the flag on those addresses was a wallet label. Following that flag to every downstream wallet was lineage.

Think of a wallet label as the number on a mailbox. It tells you whose box it is. But the number itself doesn’t tell you about where any particular letter inside came from.

A wallet label sits on an address. Lineage sits on the money.

How financial institutions use digital asset lineage

Digital asset lineage becomes useful whenever the meaning of money needs to persist after a transfer.

Different teams use it for different reasons, but they’re all answering the same underlying question:

We’ll illustrate three common use cases.

Tracking stolen funds - Elliptic Investigator

When a hacker steals money, they don’t leave the money there.

North Korea’s Lazarus Group for example drained ~$1.5 billion from Bybit in February 2025, then moved the funds through dozens of wallets, assets, exchanges, and bridges within hours in an attempt to obscure the trail.

A compliance or forensics team starts by flagging the attacker’s wallet as the source. From there, lineage carries that label on every dollar as it hops from wallet to wallet, allowing investigators to identify which downstream wallets are now holding “tainted” money.

This is the digital version of a marking stolen banknotes so they're spotted wherever they turn up.

 lineage follows funds between wallets, but it goes dark at a centralized exchange. Once stolen money lands in an exchange's omnibus wallet, onchain tracing can't determine which customer withdraws it. At that point, only the the exchange's internal records can. This is why forensics work shifts from tracing to subpoenas at that point, and is why compliance teams try to quickly identify and flag suspicious funds flagging funds before they reach an off-ramp.

Treasury teams often acquire the same asset at different prices over time.

The chain shows every purchase, but doesn’t preserve the purchase price associated with each unit. Without that information, realized gains, losses, and tax reporting become much harder.

With lineage, each acquisition can be labeled with its cost basis. As those assets move between wallets or are partially sold, the cost basis moves with them according to the chosen accounting rule (FIFO, LIFO, or another policy). This gives you tax- and audit-grade books for onchain holdings.

Attributing stablecoin supply to partners

Stablecoin issuance is often distributed through partners and pay incentives based on how much circulating supply each partner is responsible for.

But once the stablecoins start moving between wallets, the blockchain doesn’t know which partner originally introduced a particular stablecoin.

Lineage solves that by labeling tokens the moment they’re allocated to a partner. As those tokens move between wallets, the attribution moves with them, allowing issuers to calculate live partner balances instead of reconstructing them later.

, where every mint, transfer, and burn continues to carry its original partner attribution.

The idea behind digital asset lineage is straightforward: attach information to money, then keep that information attached as the money moves.

The hard part is making those labels stay correct.

Unlike balances or transfers, lineage isn’t something a blockchain records for you. Every answer has to be reconstructed by replaying the chain and maintaining additional state alongside it.

While real-time blockchain indexing is a hard problem to solve in its own right, reading the chain is just the starting point. Goldsky’s indexers lets you do this across 

The hard part begins after you’ve indexed the chain. Doing that correctly at scale comes down to three challenges.

The information you care about isn’t onchain

You can’t look it up. The blockchain won’t tell you which partner originally issued a token, or that a wallet belongs to a sanctioned entity.

Those facts have to come from somewhere else. Usually you.

The first step is choosing an onchain event thatrepresents that fact (which we’ll later call the 

) and then attach the label yourself before propagating it through every subsequent transfer.

Order isn't optional, and chains rewrite themselves

Ownership changes with every transfer, whether initiated by users or smart contracts. To know which labels make up a wallet’s balance, you have to process events in the exact order they happened. Getting the order wrong corrupts every calculation after.

Complicating things further, chains also reorg. Blocks you already processed get retracted, new ones replace them, and your lineage has to rewind and replay along with the chain.

The state is large and never stops moving

To know what each wallet holds by label, you maintain a running, labeled balance for every address that has ever touched the asset.

Every single transfer updates that state. For an asset with millions of holders, that’s a big, constantly changing dataset. Not something you can periodically recompute or cache once and forget.

The rest of this article shows how those three problems can be solved with a single streaming pipeline.

How to trace digital asset lineage (3 ways)

Teams today usually use one of three common methods to trace lineage within blockchain data: approximation, batch job, and real-time tracking. Unsurprisingly, each one trades fidelity for effort.

The difference is how faithfully they follow funds as they move. Some only track boundary events (like mints and burns). Some reconstruct lineage after the fact. The most complete approach follows funds in real-time as they move.

1. Approximate lineage from mints and burns

The simplest and cheapest model is approximation.

For partner attribution, you’d book-keep only the boundary events: how much each partner minted, how much was burned, and the result netted into a per-partner supply number.

This works when the only question is “How much net supply should be attributed to each partner?”

It doesn’t involve state, propagation, or a query you can run. It works when payouts depend only on net supply attributable to a partner and nobody needs to know where specific funds went.

Because this method doesn’t track funds, it can’t answer questions like:

Those answers live in the transfers between boundary events, which this method doesn’t track.

The next step up is a scheduled job that recomputes lineage from scratch.

Teams that already pull onchain data into a warehouse like BigQuery, Snowflake, or ClickHouse reconstruct balances and walk the transfer graph to propagate labels, with recursive SQL, Spark, or custom jobs.

This is a good fit for backward-looking work where stale data is acceptable such as

3. Track lineage in real time with an indexer

The most complete approach is real-time tracking.

Tracking lineage in real time requires blockchain indexing plus a stateful engine on top: stream events in order, maintain a labeled balance for every address, and carry the label forward on every transfer.

This is the model used when teams need a current fund-level answer rather than a periodic report. It avoids the blind spots of approximation and the staleness of batch recomputation.

The hard part is operating it. You need ordered replay across chains, reorg rewinds, and continuously updated per-address state for assets with millions of holders. Most teams don’t want to build and run that infrastructure themselves.

, this becomes a managed pipeline. You get the live lineage output without the months it takes to build ordering, reorg handling, and state management from scratch.

Real-time Data

RPC Infrastructure

Automation

Open Source

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