Crypto Data Firm, CoinMarketCap, Rolls Out ‘Confidence’ Indicator For Ranking Algorithm for Market Pairs
- Leading crypto data aggregator, Coinmarketcap.com, introduces new metric systems on the platform to combat fake volume data from exchanges.
- The release on the changes on the platform also includes a new default ranking system for market pairings on the platform.
In an announcement released on Friday, May 29, 2020, CoinMarketCap announced new changes to its metrics and market pairing ranking systems in a bid to chaff out exchanges presenting fake volumes. The new system, however, is facing major criticism from the community who claim the changes favor its parent company, Binance exchange.
Studies on cryptocurrency exchanges have found that over 90% of the trading volume reported by the platforms is fake. In a bid to combat the reporting of fake volume, Today, CoinMarketCap announced the “Confidence metric” that aims to “determine if the volumes reported by exchanges are inflated, and to what extent”.
Coinmarketcap introduces new market pairing metric
Following the launch of the #RoastCMC campaign that saw the community critic and make fun of the aggregator, the company has started to take steps towards a better platform. The platform will introduce new metric systems on the market pairings using an algorithm built including the Liquidity Score, the recently added web traffic, and the volume of each pairing.
Previously, the system only used the volume, which enticed some exchanges to inflate volumes on some of their pairs.
While the current system is expected to boost the credibility of the market pairs listings on the platform, there are concerns on Binance role in the latest changes.
Is CMC favoring Binance?
Since the reported $400 million acquisition sale of CMC to Binance exchange a number of analysts have criticized the independence of the data aggregator. The addition of the web traffic factor in the metric system tilts the favor to Binance exchange, which topped the rankings as soon as the factor was added.
Changpeng ‘CZ’ Zhao however, came forward claiming the latest changes on the crypto data platform is set to provide a short term solution for the platform.