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The most popular cryptocurrency price aggregation site has launched a new way of ranking exchanges that keeps owner Binance at the top of the exchange chart.
CoinMarketCap was criticized last month after its new web traffic-based ranking system gave Binance – which acquired the aggregator for $ 400 million in April – a perfect score. “Six weeks after Binance’s acquisition of CoinMarketCap [is] already abused to manipulate the rankings “, tweeted an angry Mati Greenspan at the moment.
Well, the price site has some good news: “We just rolled out a new algorithm to replace the previous default trading ranking based on Web Traffic Factor,” reads an upbeat blog post on Thursday.
CoinMarketCap’s new ranking system basically merges all the metrics used to evaluate the individual markets of an exchange, such as its bitcoin or ether market, into an easy-to-read score.
There are two components: the market pair is the trading volume, liquidity and web traffic factor reported by an exchange, combined to create a single score. This is evaluated by a “confidence” indicator where the CoinMarketCap algorithm evaluates whether the score is accurate or whether it appears to have been faked.
Carylyne Chan, CoinMarketCap’s interim CEO, said in a statement that the new ranking “will provide our users with an accurate reflection of the trading venues, as they are evaluated on a triage of factors that provide a complete picture.” The “machine learning algorithm,” he added, would dynamically adapt to improve accuracy as it receives more data over time.
New metrics, including new “quantitative factors”, were currently being tested and could be incorporated into the new ranking system at a later time.
See also: Binance doesn’t have a headquarters because Bitcoin doesn’t, the CEO says
Like other price aggregators, CoinMarketCap tried to find a solution for the deceptive data. As stated on its methodological page, inflating volumes “to give the impression of legitimacy and a false sense of liquidity in the markets … has, in the past, helped to erode confidence in the cryptocurrency sector and, at times, has misled both investors and traders. “
Although CoinMarketCap previously used an adjusted volume metric, which excluded biased or suspicious data, it was replaced last month with a web traffic factor, the first phase of a new ranking system to improve the identification of inflated volumes.
But, as CoinDesk reported last month, eyebrows were raised as Binance, which was ranked 15 under the old system, climbed to the top with a web traffic score of 1,000, the best possible.
CoinMarketCap denied favoring its owner. Claiming the company was at the start of a major overhaul of its ranking system, the company said a balanced and accurate picture would emerge as more metrics came online.
Chan told CoinDesk at the time that “the web traffic factor is one of many factors that will be in the final iteration of the new ranking.” This position was reiterated on Thursday when CoinMarketCap stated that “Web Traffic Factor was only an intermediate step in developing this complete solution”.
See also: Binance announces white label exchange infrastructure for local markets
So, now that it’s online, how does Binance treat CoinMarketCap’s fully iterated rankings?
Well, don’t expect too many changes. The exchange page, which uses the new algorithm, keeps Binance at the top of the table.
In terms of rankings for the largest markets: bitcoin, ether, tether, and litecoin – which account for around 80% of total activity – Binance consistently ranks first.
Along with high liquidity and volumes, as well as a perfect web traffic score, CoinMarketCap has awarded, along with similar pairs for Coinbase and Kraken, a 100% trust score – it has total confidence in Binance data.
Speaking to CoinDesk, Chan reiterated that CoinMarketCap has only provided neutral data and rankings and has “not updated the algorithms to meet anyone’s agenda”.
“CoinMarketCap continues to be operated as an independent entity from Binance,” he wrote in an email. Any changes to the methodology came solely from the “willingness of our team and an understanding of what’s best for the crypto industry.”
“We will continue to be transparent when we update our methodology, without any preferential treatment for any exchanges or projects (even those related to our parent company!),” He added.
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