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CoinMarketCap initially rejected the number with which Binance is now in first place

May 15, 2020

The data aggregator of cryptocurrency markets CoinMarketCap yesterday changed its method of ranking exchanges based on their standard web traffic. This puts Binance’s new CoinMarketCap owners first..

However, this is in sharp contrast to the words of the Chief Strategy Officer and Acting CEO of CoinMarketCap, Carylyne Chan, the In a podcast interview late last year, he said that web traffic was “not a good indicator”..

Introduced for six hundred million dollars just six weeks after Binance bought CoinMarketCap. The new ranking method prioritizes web traffic over CMC’s carefully developed “liquidity count”.which was only introduced in November and should become the standard classification.

CoinMarketCap initially rejected the number with which Binance is now in first placeCoinMarketCap initially rejected the number with which Binance is now in first place

Based on average liquidity, Binance ranks fourth after Bitfinex, Coinbase Pro and Huobi Global, respectively.

Indications are not good

In a sequel to the Blockchain Journeys podcast that was recorded at the Singapore Capital Conference in November and presented the liquidity figure, Chan was specifically asked if he wanted to use web traffic as a number. She said:

“We saw other people do things like what you said, web traffic [de verificar que los exchanges son legítimos]But people trade API keys so web traffic is not a good indicator. “

However, the CoinMarketCap blog post of May 13 does a very different story:

“Since cryptocurrencies are a retail-driven market, a high-volume exchange must have a large number of retailers (ie buyers and sellers). Instead of asking the exchanges to provide their user numbers, a good intermediate proxy will be web traffic So we designed the web traffic factor in this iteration. “

The Web Traffic Factor is a combination assessment that offers different weights in: “Page views, unique number of visitors, bounce rate, time on site, relative ranking and keyword search in important search engines.” This could answer some of Chan’s earlier concerns.

After the original version of this story was released, Chan replied on Twitter: “If you read our post in full, you will find that traffic is just * one of the many factors * that make up the final algorithm. I * recently * said that speed is essential, so instead of waiting months, we iterate. Faster = more feedback = better for users. Next iteration: end of May “.

A classification to rule them all …

The blog post said it would launch a single page to rate the exchanges (instead of several pages) By default, this is “sorted by the new figure” Web Traffic Factor “while the other figures are retained (e.g. liquidity factor, volume, markets) in the following columns “.

The article provided no explanation for why CMC gave web traffic priority over its liquidity count.. CMC said in November that the liquidity figure “should ultimately replace volume as the default when market pairs and exchanges are classified”.

Exchange with “real volume”

In the one-hour podcast interview Chan also declined another method of checking the depth of the order book, along with Bitwise’s list of ten “real volume” exchanges, one of which is Binance..

“He mentioned the Bitwise report. So he selects ten exchanges that they have found to be serious and good, but I think if I look at just a few of those that have passed the tests, they also wash the trades … that is not exhaustive. ”

Chan concluded from the three approaches: “I think everyone is not based on data, it is very subjective. So When looking for a solution, we try to avoid such logical errors and be more data-driven. “.

CMC and CZ agree that there are problems

In the blog post announcing the change, CMC recognized the limitations of the new character that put its owners first:

“We are aware that web traffic does not provide the complete picture, as there are traders who trade with API keys, for example. As mentioned before, this number is an intermediate step in this iterative process.”

Binance CEO, Changpeng Zhao admitted on Twitter that the number is “not” 100% accurate “..

CMC is independent

Binance bought CMC (worth $ 400 million as reported but not confirmed) in early April and downplayed concerns about conflicts of interest that arise from an exchange that owns the same site reporting exchange volumes::

“CoinMarketCap will continue to function as an independent business unit. While the Binance cryptocurrency exchange and its native BNB token are displayed on CoinMarketCap, CoinMarketCap and Binance are separate entities that adhere to a strict independence policy: Binance has no relationship with CoinMarketCap ratings, while CoinMarketCap has no control over Binance’s operations. “

Note: This story has been updated to include Carylyne Chan’s answer.

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