CoinMarketCap Launches New Ranking Methodology Integrating Exchange Liquidity
As soon as on Monday, September 2nd, CoinMarketCap will announce a new change in their ranking methodology. The main goal is to offer better information regarding exchange liquidity and the ranking of all crypto assets in the platform. This comes after an announcement regarding the methodology they use to list and rank exchanges. The information was released in a blog post on August 30.
CoinMarketCap Announces New Ranking Methodology
CoinMarketCap, one of the leading sources of market data and information about the crypto space, is announcing a change in its ranking methodology. Although the official announcement is expected to be on September 2nd, they have informed that they will be testing a change in their systems to “represent crypto assets more fairly.”
You've spoken, we've heard! We will be testing a change in our ranking methodology on Monday, Sept. 2, to represent all cryptoassets more fairly. Please see the full details here: https://t.co/oOFfcliqG5 😃 We look forward to your feedback!
— CoinMarketCap (@CoinMarketCap) August 30, 2019
The platform has also decided to introduce an internal feature that would exclude crypto assets from being eligible to be ranked in the Top 200 if they did not meet the criteria they’ve specified in their methodology. That is related to verify the project’s supply information with no incongruities, significant liquidity and trading activity with normal spreads across sufficient sources of market data, among other things.
Section 10 of their methodology reads:
“The sheer variety of monetary and accounting models used by projects adds complexity to the process of verification, which means that there will be occasions where CoinMarketCap will have to exercise its discretion in determining a project’s circulating supply and/or eligibility for a Top 200 ranking.”
With the new change that they are going to announce on Monday, they will be fixing and streamlining the rankings in order for all the cryptocurrencies to be fairly represented in the rankings. As they have informed in the past, they are going to release new metrics that are going to be based on liquidity, which would address the concerns related to inflated volumes.
At the same time, they recognize that there are some limitations of using just volume as a metric. That’s why they are going to be improving their metrics by adding liquidity information to the data provided. The new liquidity metrics are going to be launched as soon as on November 12, 2019. This new metric will factor into market pairs and will be combined with other metrics that will go into the ranking of exchanges and projects.
CoinMarketCap is going to be releasing more information in the coming months before the official release of this new and improved system to understand cryptocurrencies and exchanges.
CoinMarketCap Launches New Ranking Methodology Integrating Exchange Liquidity – Source: https://usethebitcoin.com