CoinMarketCap adds a new way of ranking crypto

Written by: Ali Raza
May 15, 2020
  • CoinMarketCap recently introduced a new way to rank crypto exchanges.
  • It changed the ranking system which used to be based on volume, to one that focuses on web traffic.
  • The exchanges' rank is displayed in points, with the best one having 1000 points, and the rest a lower count.

The largest cryptocurrency price tracking website, CoinMarketCap, has just launched a new way to track coins. Recently, reported that CoinMarketCap got acquired by Binance for $400 million, which was estimated as the largest crypto deal to date.

Now, the popular price tracker started introducing new features, including ranking crypto exchanges by web traffic. Interestingly enough, Binance exchange itself, which holds a perfect score.

A new way to rank crypto exchanges

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Of course, this is not the first time that CoinMarketCap offers ranking exchanges. So far, anyone could see how the exchanges rank according to trading volume However, this functionality saw a lot of criticism, as it used to share misinformation.

A lot of exchanges tend to make themselves look better by faking their volumes, which is a troublesome thing for the entire crypto industry. After it was discovered that CoinMarketCap was also implicated in displaying inaccurate data, the company acknowledged the error.

It said that the volume inflation is a serious problem that bothers the entire crypto space. It also came up with a method of fighting false data on exchanges by introducing a new feature, Web Traffic Factor.

The new ranking system does not rely on exchanges themselves for providing data regarding their traffic. Instead, it will rely on a new scoring system, where platforms will win points. The top platforms will receive 1,000 points, while the rest of the exchanges will receive their own scores depending on how they compare against the platform holding the top spot.

Also, the new feature will update the scores on a monthly basis.

The comparisons will revolve around a number of different factors, including unique visitor count, page views, bounce rate, relative ranking, keyword searches per search engines, and time-on-site. Meanwhile, the information used for these comparisons will come from multiple sources, such as Alexa, Ahrefs, and SimilarWeb.

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Binance in the lead

Unsurprisingly enough, the top listed exchange is Binance itself, meaning that it holds 1,000 points. The second in line is Coinbase Pro with 972 points, followed by BitMEX (960), Kraken (856), and Indodax (838).

When Binance acquired CoinMarketCap, many were concerned that the site’s information regarding exchanges will no longer be neutral and reliable. They were implying that the exchange might use the data website to present itself as the best trading platform.

Binance’s CEO, Changpeng Zhao, never addressed these concerns. However, he did say that the two will operate independently. As for the ranking feature, he said that he finds it useful, as it provides a ‘clear view of the field.’

https://twitter.com/cz_binance/status/1260991869246308353

While placing Binance at the top seems like the exchange IS trying to promote itself, the fact is that resource websites such as SimilarWeb do confirm CoinMarketCap’s new ranking.