As the cryptocurrency space matures, it has become apparent that certain factors contributing to how different currencies are ranked have been flawed. Major price and ranking platforms have been found to provide, either directly or indirectly, fake data, and a push has begun to clean up the system. CoinMarketCap (CMC), which previously acknowledged that some of the data on its platform was fake, is taking a major role in revamping the structure and has announced a new ranking system that will be introduced later this year.
During a roundtable held yesterday by the Data Accountability and Transparency Alliance (DATA), CMC revealed its new liquidity ranking system. The structure, which will be officially launched November 12, looks to overhaul crypto rankings and eliminate wash trading that is currently found on the site.
By using currency liquidity as a measure, CMC believes it can offer a more accurate profile of where different coins stand in relation to one another. It cautions, however, that it could be problematic, since basing the rankings on liquidity requires more resources since the numbers are constantly changing and are more difficult to track and report. However, liquidity ranking cannot be manipulated as easily as volume rankings and should help to put all currencies on a more even playing field.
Prior to the introduction of liquidity ranking, CMC will introduce a new self-reporting solution for exchanges. This is expected to go live on October 14, and is meant to incentivize exchanges to be more transparent. It will reward “badges” for data points that the exchanges reveal, such as office locations, order books the exchanges share with others, know your customer policies and other types of information.
Despite the fact that there have been verified reports of fake data being supplied to the crypto community, there has been zero accountability and zero repercussions. As the largest crypto data aggregator, CMC is hoping to provide better transparency and confidence in the Bitcoin ecosystem by forcing exchanges to include more data. This past May, it announced that it would start delisting exchanges that didn’t provide data that it said was mandatory.
DATA is a group of exchanges and crypto projects that was established this past May. It includes exchanges such as Binance, OKEx, Bittrex and Huobi, as well as others; however, notably absent are exchanges like Kraken and Coinbase.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.