CoinMarketCap is set to adjust crypto ranking standards, release metric to weed out fake volumes
August 31, 2019, 2:13PM EDT
1 min read
CoinMarketCap is set to adjust a change it recently made to its cryptocurrency ranking mechanism, which resulted in "harsher-than-intended rank drops."
The data provider rolled-out an internal feature that would prohibit coins from being ranked in the Top 200 if they did not meet the firm's so-called Section 10 criteria. But the change went too far, according to CMC.
"Due to the segmentation logic of this change, some cryptoassets that did not meet the criteria had harsher-than-intended rank drops," the firm said in a blog post. "In extreme cases, a cryptoasset dropped 1000 ranks."
As such, CMC will announce Monday an update that will "streamline the rankings so that all crypto assets will be fairly represented in the rankings."
CoinMarketCap has long been criticized for its exchange ranking by volumes, which market experts have proven includes fake data from numerous exchanges. Bitwise has put out research to show as much as 95% of cryptocurrency trading volumes are erroneous. The Block's Larry Cermak estimates it sits as high as 86%.
As per the blog post, CMC will soon incorporate a new metric around liquidity into its exchange ranking process — in an attempt to weed out fake volumes. Unlike others who have chosen to exclude certain exchanges from their own rankings altogether, CMC says its new metric will be comprehensive and not easily game-able.
"Ultimately, this liquidity metric will factor into market pairs, and will be combined with other metrics that will go into the ranking of exchanges and projects," according to CMC. "We are continuing to refine this based on feedback, and welcome more of your thoughts too."
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