CoinMarketCap Implements New Changes to the Ranking System
Here are two new metrics from the top cryptocurrency data aggregator CoinMarketCap (CMC). The new metrics is to rank exchanges and market pairings according to several factors that are aimed at reducing the effect of fake volume on the platform’s data.
In recent times, CMC presented some changes which proved controversial for favoring its new parent firm Binance, thereby requiring the changes just introduced.
On May 29, CMC presented its new ‘Confidence’ metric for the identification of suspicious volumes reported by exchanges. It utilizes a machine-learning algorithm for examining all data that CMC ingests, thereby determining possible inflation in the volumes reported by exchanges, as well as the level of inflation.
Apart from the new Confidence metric, CMC likewise presented a new default ranking system for market pairings across the platform, to replace the present metric of volume for default sorting.
The new default ranking system for market pairings utilizes a single algorithm considering each pair’s Liquidity Score, Web Traffic Factor, and volume. CMC is planning to use the same factor as default sorting for exchange rankings.
Based on users’ misinterpretation of the term “adjusted volume” as volumes adjusted to remove inflated volumes, on May 22, CMC explained that the “adjusted volume” metric only excluded the volume of derivative pairs, pairs with no transaction fees, or pairs conducting transaction mining. Hence, the platform announced the replacement of “adjusted volume” with “volume,” which is just trading volume reported by each cryptocurrency exchange.
CMC introduced its new “web traffic factor” on May 14 for the analysis of user activity on exchanges, as well as the number of page views, unique visitors, the time spent on site, search engine bounce rate, and search engine rankings.
However, Binance occupies the top position after the introduction of the web traffic factor and people started criticizing CMC because Binance is its new parent firm. Before Binance became its parent firm, CMC had previously considered and rejected a similar metric.