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A month after Binance bought CoinMarketCap for $ 400 million, the cryptocurrency price aggregation site unveiled an exchange ranking system that gives its new owner the best possible score thanks, in part, to Twitter feed of the CEO.
“We listened,” said CoinMarketCap new owner Changpeng “CZ” Zhao, tweeting the news coming out Thursday. He was referring to the fact that many traders had expressed concern about exchanges artificially inflating volumes so that they seemed more important – known as wash trading. “Now, I can finally get a clear view of the pitch and see who the real upcoming exchanges are, lol.”
CoinMarketCap’s new metric focuses on web traffic. In a blog post this week, the price site – which received nearly 29 million hits in April – said metrics including page views, time on site, and bounce rate were a “good intermediate proxy” to determine the amount of activity of an actually human exchange.
Coincidentally, perhaps, Binance absolutely surpassed these new rankings. It achieved a perfect web score factor – 1,000 out of a possible 1,000 – which means CoinMarketCap believes 100% activity on Binance is human. By comparison, close rivals Coinbase Pro and Kraken achieved a web score factor of 972 and 856, respectively.
Decrypt reported that Binance was ranked 15 in CoinMarketCap’s old trading metrics system. While the previous system had shown adjusted volumes, which excluded potentially biased or suspicious data, the new rankings only show volumes provided by the exchanges themselves.
Again in this metric, Binance ranks first, with volumes reported at just under $ 8 billion in 24 hours, with both Kraken and Coinbase volumes at around $ 450 million per day.
“This trading leaderboard is much more usable now,” Zhao said in a follow-up tweet, adding that they will try to refine the new stock market ranking better in the future. CoinMarketCap’s blog post states that the site is also designing a new algorithm that would use the liquidity and depth of the book to better detect disparities between actual and reported volumes.
See also: Binance invests in a regulated Indonesian crypto exchange
CoinMarketCap was previously against the idea of using web traffic for ranking. Chief Strategy Officer Carylyne Chan said in a podcast late last year, when it was still an independent company, that web traffic “was not a good indicator” as many traders use API keys, which obfuscate the collected data.
Chan, who is now the interim CEO of CoinMarketCap, She said on Twitter last Friday that web traffic would be “just * one of many factors * that will make up the final algorithm. I said * more recently * that speed is imperative, so we’re iterating instead of waiting for months.” [Emphasis hers.]
Speaking with CoinDesk, Chan said: “We have updated our ranking metric over the past year, as evidenced by our ongoing work with Liquidity Metric and Liquidity Score … In this update, we have also explicitly stated that Web Traffic Factor is just one of the many factors that will be in the final iteration of the ranking. “
CoinDesk asked Chan if Binance was involved in the decision to change the rating system. He said the site “used CZ’s presence and feed on Twitter as a channel to gather feedback.” However, it was one of several inputs into the ranking methodology improvement process, which also included customer surveys.
See also: Binance doesn’t have a headquarters because Bitcoin doesn’t, the CEO says
Some cryptocurrency traders are not happy with the change. Mati Greenspan, founder of Quantum Economics, tweeted last Friday Binance had “abused” its acquisition of CoinMarketCap “to manipulate the rankings”. Sam Bankman-Fried, founder and CEO of FTX Exchange, who received an undisclosed investment from Binance in December, She said the new web traffic score “leaves something to be desired”.
Zhao said last week Binance wanted to keep CoinMarketCap independent. Speaking at the recent Ethereal Summit, he said the money spent to acquire the exchange means that Binance has an incentive to protect its neutrality.
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