CoinMarketCap (CMC), a global cryptocurrency data provider platform, has introduced new indicators to screen out the amount of false transactions and inflated volumes in the digital currency market.
According to the blog by CMC, the platform introduced a reliability index to confirm false transaction volume and added factors reflecting the ranking of market pairs.
The ‘Confidence’ indicator is used to check whether the transaction volume (vol) has been inflated, and all data collected by CMC such as liquidity scores, web traffic elements, order depth, time and sales volume are reviewed through a machine learning algorithm.
The algorithm for ranking the trading pairs of the market has also changed. Previously, ranking was based on transaction vol. In the future, the ranking will be implemented considering three criteria, not only the transaction volume, but also the liquidity score and web traffic factors. Changes can be viewed on the Market Pairs tab of each cryptocurrency detail page.
Coinmarketcap is trying various ways to provide accurate and transparent market information and improve the user experience.
On May 22, the site eliminated the ‘adjusted transaction volume’ index to reduce user confusion. Adjusted trading volume refers to trading volume that does not include transaction pairs without fees, derivatives, etc., because it is often confused with the trading vol minus the false trading volume.
The most controversial change was the ‘web traffic factor’ reflected on May 14, 2020. It is an index that analyzes user activity in the exchange, such as the number of page views on the exchange, the number of unique visitors, the time spent on the site, the speed of search engine bounce, and the ranking of search engines.
Immediately after introducing the standard, the controversy grew as parent company Binance ranked first in the CMC exchange ranking.
CMC was acquired and acquisitioned by Binance in April, as coinidol.com, a world blockchain news outlet, reported. Since then, the digital currency industry has expressed concern about CMC’s information neutrality.
For instance, Alysa Xu Chief Strategy officer (CSO) OKEx revealed that Web traffic cannot be the primary criterion for evaluating exchanges. In response to this controversy, CEO Binance Changpeng Zhao said that there is no unilateral work order for coin market caps.
Nevertheless, the trust in CoinMarketCap has decreased as its objectiveness and neutral nature is highly questioned now. Many cryptocurrency users are looking to switch to other ranking services as they are believed to be more objective and unbiased.