CoinMarketCap Alters Ranking System for Crypto Exchanges
The most visited website for cryptocurrency investors and enthusiasts, CoinMarketCap, implemented a revamp of the ranking of market pairs. The new system will essentially change the order for exchanges with the removal of “adjusted volume” in place of a “Confidence” and liquidity indicators for each market pair.
The new ranking of crypto pairs will be based on three factors two of which are designated at CMC – reported volume, liquidity and an estimation of an exchange’s user base (via the proprietary Web Traffic Factor). Liquidity and Web Trafic Factor are unique measures introduced by CMC. The interim CEO of Binance, Carylyne Chan, notes in the blog post,
Our new ranking and Confidence indicator will use the sophisticated tools we have at hand to simplify the process of deciding on the best market pairs, saving our users time, and managing some of the common risks endemic to errant exchanges.
Inflated volumes via wash trading on exchanges have plagued the entire crypto industry. The unethical practice forms the leading strategies for attracting more users. CMC, is the most important website for the price-tracking on exchanges. Hence, the crypto-community, including CMC management has felt the responsibility of filtering the data received from exchanges.
However, the recent acquisition by Binance raised concerns around the independence and authenticity of the website owned by an exchange itself. Coincidently, the new metrics put Binance on top position for the top listed cryptocurrencies on CMC. While Binance projects independence, the addition of new and ambiguous market pairs is not likely to add to the credibility of the website. Nevertheless, it has been leading the tracker space for quite some time, and the new metrics can become default benchmarks for crypto users.
Do you think that the new metrics are justified or needs alteration? Please share your views with us.
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