CoinMarketCap Wanted to Fix Fake Volumes, CZ Said To Implement a Simple, Short-Term Fix
- Once again, Binance founder and CEO, Changpeng “CZ” Zhao, is trying to clarify that CoinMarketCap works independently of the leading spot exchange.
- Binance and Zhao have received a lot of new flak over the acquisition of crypto data site CMC in a $400 million deal a month back.
Just last week, as Bitcoin Exchange Guide reported, in an attempt to address wash trading, CMC completely removed a metric that highlighted the discrepancy between published and real volume to focus on traffic volume.
Ciara Sun, Head of Global Business and Markets, Vice President of the competing exchange, Huobi, which is now ranked 18th on CMC, also shared her displeasure with the new ranking system.
Institutional trading volume grew by 128.25% in Q1 2020 vs Q4 2019.
From Fidelity, nearly half of institutional investors using metrics see digital assets within their portfolios.
Yet @CoinMarketCap is now using web page views and unique visits.
Look forward, not back.
— Ciara Sun (@CiaraHuobi) May 18, 2020
Get Over it, Binance Bought it!
Yes, the company has bought CMC, making it the latest “part of the Binance ecosystem and family.” But like other teams, they make their own decisions and work towards their own goals “fairly independently,” explained CZ in a post today.
And unlike many, CZ doesn't have a “binary interpretation” of words like decentralization and independence. Instead, he perceives them on a “gradient scale,” and when it comes to autonomy, Binance offers a lot of it to its users.
CZ also cleared that he has regular meetings with the CMC team and provides them with his suggestions but does not “dictate them.”
But if you think he won't be tweeting about CME, the business he recently acquired, then you have something else coming. CZ said,
“Should I not tweet about CMC to be seen as more distant or “independent”? Well, get over it. We bought it. You can safely assume I will continue to tweet heavily about CMC, just like I will continue to do so for Binance, BNB, Trust Wallet, WazirX, and all of the teams and projects in the Binance ecosystem.”
He further shared how, based on twitter feedback, they decided to go with the simple metric as a short-term fix rather than going with CMC team's initial plan to “fix the exchange ranking and fake volumes issue in one month.”
The plan was to have a combination of updated liquidity metric and web traffic but CZ's “feedback” was, it's “too slow” and to “find a simpler way to fix it in a week.”
And here we go.
Unavoidable Conflict of Interest Will Remain
Although Binance has the “largest trading volume on most days” and ranks highest by some metrics while not by others, they will be using a combination of metrics to improve CoinMarketCap in the long-run.
But everyone isn't happy with CZ's “Rolling with the punches, but staying transparent,” plan.
Analyst Mati Greenspan, who has been very vocal about his displeasure of CMC's acquisition by Binance yet again tweeted “Ownership inherently causes an unavoidable conflict of interest.” He added,
“The equivalent of this would be if JP Morgan bought Moody's rating agency. Then, Jamie Dimon claiming that they're still independent because he's not the one making decisions about how they rate things.”