San Francisco-based bitcoin exchange GDAX released their “Digital Asset Framework” earlier this week. That framework explains the selection criteria for new tokens listed on the platform.
As the cryptocurrency world continues to grow, GDAX will inevitably add more token pairs to its network. To support this growth, GDAX plans to add assets that align with their new Digital Asset Framework.
Earlier this year, GDAX announced that it would be adding more currencies to its platform over the coming months. However, the only asset added by GDAX so far has been Litecoin.
As part of their announcement, GDAX by Coinbase described how there are now more than 1,100 digital assets listed on exchanges, and over 100 crypto hedge funds have collectively raised over $2 billion in capital. Venture firms have invested more than $800 million into digital asset startups. With that in mind, there’s a requirement for clearly-defined standards.
Coinbase's GDAX operates under the BitLicense of New York State. By sharing their Digital Asset Framework, they hope to improve transparency across the industry while highlighting the factors that go into selecting new digital tokens.
“This framework is not intended to be a definitive methodology, investment advice, or a commitment to support any specific asset,” explained the GDAX team in a statement. “As the technology, use cases, and regulatory environment evolve, so too will this framework. We are committed to supporting more assets, but our priority is always to protect customer funds and comply with regulatory requirements.”
So what types of things will GDAX look at when selecting new coins? Keep reading to find out.
GDAX’s Criteria for Selecting New Coins
GDAX analyzes a wide variety of factors before listing digital tokens on its exchange. Here are some of the factors outlined in the recently-released Digital Asset Framework:
- Aligns with the mission and values of an open financial system
- Engineering team and product quality
- Team background, history, and experience
- Governance structure
- Legal and compliant (to determine whether or not GDAX can legally offer the asset)
- Market supply and liquidity
- Asset distribution (i.e. not limited with gateways to national currency)
- User demand and community support
- Network standards, nodes, market cap, transaction chain growth
- Token type
- ICO structure and transparency with an ethical and professional code of conduct
You can view the Digital Asset Framework for yourself here. It includes more detailed insight into all of the above factors.
GDAX is typically ranked in the top 5 or 10 exchanges by 24 hour market volume, according to data from Coinmarketcap. The platform offers trading in major fiat currencies like EUR, GBP, and USD, along with major cryptocurrencies like BTC, ETH, and LTC.