CoinMarketCap Changes The Ranking Mechanism, Binance "One Step" To The Top
Crypto-market data collector CoinMarketCap has changed a number of exchange ranking rules, which makes Binance quickly dominate the top 1 of leading exchanges.
CoinMarketCap changes the ranking mechanism, Binance "one step" to the top 1
The change goes against the strategy of director Carylyne Chan in an interview late last year, that the amount of traffic flowing to the web is not a good criteria to rank an exchange.
Notably, only 6 weeks ago, Binance officially announced the acquisition of CoinMarketCap and this new evaluation criteria of CMC will put web traffic above priority on liquidity parameters, the criteria introduced first. that in November and which is considered the default criteria of the platform.
Accordingly, when ranked for average liquidity, Binance ranked only 4th, after Bitfinex, Coinbase Pro and Huobi Global.
"Indicators are inappropriate."
In a podcast of Blockchain Journeys in Singapore in November, the event at which the liquidity index was introduced, CEO Chan was asked about web traffic parameters. She said:
“We have encountered many similar questions before, whether web traffic is a good criterion for evaluating the quality of an exchange. However, because many traders use APIs, web traffic is by no means a good enough evaluation criterion. ”
However, in CoinMarketCap's May 13 blog post, an opposite statement was made:
“In an early market like cryptocurrencies, with a trading floor with a large trading volume, they need to have a sufficiently large and proportionate user base. Instead of relying on the number of users published by the exchange itself, we want to rely on traffic to be able to compare fairly. ”
The new ranking of CoinMarketCap is based on Web Traffic Factor specifications
Web Traffic Factor index is the total score based on criteria such as "pageview (number of page views), unique visitors, bounce rate, time spent on the page, and some keywords searched on the search bar. . "
Is liquidity the best parameter?
In another podcast, Chan said the way the script was analyzed, besides the "real volume" solution from Bitwise, was still unreasonable.
Ms. Chan then concluded:
“I think all of these assessments are not data based and are fully aware of the evaluator. For us, we always want to find solutions to avoid basic logic errors and rely on a more solid data base. ”
CMC and CZ both agree that this is a problem that needs to be addressed
In the post announcing the change, CMC also acknowledges the weakness of the new scoring method based on this traffic:
"We are aware that web traffic does not completely provide an overall picture."
Binance CEO Changpeng Zhao also posted a tweet confirming that the index is not completely "100%".
“This index is actually quite skewed towards web traffic, not entirely 100% accurate, but this is also considered an improvement. This needs more than future efforts. ”
CMC is completely independent
Binance acquired CMC for a rumored value of up to US $ 400 million in early April. Besides, the floor also made statements that rejected the prospect that the platform would have bias factor for Binance:
“CoinMarketCap will operate as an independent business institution. Although the exchange Binance and BNB are assessed on the platform, CMC and Binance still have very strict regulations. Binance will not interfere with the grading mechanism on CMC, while CoinMarketCap also has no impact on Binance's operations. ”
Heiko Closhen, Entrepreneur