CoinMarketCap Takes Initiative to Quell Criticism of Gaming Its Algorithms for Listing
CoinMarketCap, which is engaged in digital coin data aggregation, has taken an important initiative aimed at quelling the criticism that it faced. For instance, virtual currency exchanges were using its statistical algorithms to help get listed without much difficulties and at the same time rank higher after listing. This kind of activities offer them not only more visibility but also provides prestige. Interestingly, Alexa has ranked the platform as the 276th most popular portal.
Removal Of Volume Requirements
CoinMarketCap disclosed that it is removing the requirements of volume for exchanges that are listed on its platform. The company pointed out the growing concerns on clarity and data transparency for taking this action. There are more than 1,650 digital currencies that are displayed on the website. One of the oft-repeated complaints that the firm has to encounter was that exchanges pump up their volumes with the help of low-fee models. This, in turn, boosts traders to increase their activity through bots or manually to get fees or lower per-trade.
However, this charge is not restricted with any single exchange as several of them are being accused of adopting questionable methods to boost their volume. This might come either from straight-up wash trading or Exchange-managed market making services. Significantly, the volume-improving scheme is termed as “transaction mining,” and this is gaining popularity among several trading platforms leading to the top daily volume chart in the site. With the help of this model, the exchange charge transaction fees and such fees would be refunded indirectly.
On its part, CoinMarketCap indicated that it was not keen on censoring any cryptocurrency exchanges and that it would make efforts to “over-provide” tools and data to analyze. This will enable individuals to make an informed decision on their own. There were certain fresh tools that provide the capability to view the volume of exchange through a longer time horizon compared to the 24-hour rankings that are currently available.
CoinMarketCap said in a statement that “Even though we try our best to verify the data with the exchanges on our site, we are not in the practice of censoring or policing others. In an open ecosystem like the one we are in, we believe that the best policy – that we follow closely – is to over-provide on data and let users make their own informed choices about what to do with that data.”
Some of the exchanges offer a filtering tool enabling users to differentiate among exchanges since they charge different models of the fee. In any case, CoinMarketCap made it clear that its objective is to offer whatever information that is possible to its users. This will enable them to take their own decision based on interpretations and conclusions.
Also, the company indicated that it did not want to force its bias into that mix. At the same time, the company wanted every stakeholder to find a solution to the digital coin sector. As the market is maturing itself in the face of regulatory actions, the portal taking some initiatives assumed importance.