The largest cryptocurrency data aggregator out there, CoinMarketCap, has introduced new metrics which are intended to combat fake volume. However, there are still concerns that the platform favors the parent company Binance, which acquired it a few months ago. As CoinMarketCap unveils changes, the factors are going to reduce the impact of fake volume on the platform’s data and change the crypto ranking system.
Also, the changes build on others that were introduced recently and have proven controversial for benefiting the parent company of the data aggregator, Binance. In order to flag suspicious volumes reported by exchanges, the data aggregator introduced its new ‘Confidence’ metric on May 29. This factor will use a unique machine learning algorithm to examine all data ingested by CMC and “determine if the volumes reported by exchanges are inflated, and to what extent” as the statement in the crypto news shows.
On top of this, CoinMarketCap unveils changes to its crypto ranking system – and introduced a new default one for market pairings across the platform with which it replaced the current metric of volume for default sorting.
As we move forward, CMC will use a single algorithm which considers a few scores such as the Liquidity Score, the Web Traffic Factor, and the volume of each pairing. The platform will soon introduce this factor as default sorting for exchange rankings as well.
If you have read the Binance news earlier this year, you probably know that the exchange acquired CMC and said that it has big plans for the platform. On May 22, CoinMarketCap removed the “adjusted volume” metric, which excluded volumes generated by pairings without any transaction fees, pairings with transaction mining, as well as derivatives.
A new post published to the platform’s blog notes that users were confused as to the nature of the pairing. Many apparently inferred that the metric sought to combat inflated volumes. The new parent company (Binance) received criticism before this for the web traffic metric’s introduction because Binance claimed the top spot as a result.
Anyways, CoinMarketCap unveils changes and the new ones are following the recent “improved liquidity score” which seeks to identify the cryptocurrency exchanges which produce the least slippage with a priority on order sizes between $100 and $10,000 for the sole benefit of retail traders.
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