The most popular cryptocurrency price aggregator site has rolled out a new way of ranking exchanges that keeps owner Binance at the top of the exchange table.
CoinMarketCap came under fire last month after its new web traffic-based ranking system gave Binance – which acquired the aggregator for a rumored $400 million in April – a perfect score. "Six weeks in and Binance's acquisition of CoinMarketCap [is] already being abused to manipulate the rankings," tweeted an irate Mati Greenspan at the time.
Well, the price site has some good news: "We have just implemented a new algorithm to replace the previous default ranking of exchanges by Web Traffic Factor," reads an upbeat blog post from Thursday.
There are two components: The market pair is an exchange's reported trading volume, liquidity and web traffic factor, combined to create a single score. This is evaluated by a "Confidence" indicator where CoinMarketCap's own algorithm passes judgment on if the score is accurate, or if it looks like it's been fudged.
Carylyne Chan, CoinMarketCap's acting CEO, said in a statement the new rankings "will provide our users with an accurate reflection of the trading venues, as they are scored on a triage of factors that provide a complete picture." The "machine learning algorithm," she added, would dynamically adjust to improve accuracy as it receives more data over time.
New metrics, including new "quantitative factors," were currently undergoing tests and could be incorporated into the new ranking system at a later date.
Like other price aggregators, CoinMarketCap has been trying to find a solution for dodgy data. As it says on its methodology page, inflating volumes "to give the impression of legitimacy and a false sense of liquidity in markets ... has, in the past, contributed to eroding confidence in the cryptocurrency industry and has, at times, misled both investors and traders."
Although CoinMarketCap previously used an adjusted volume metric, which excluded skewed or suspicious data, it was replaced last month with a web traffic factor, the first phase of a new ranking system to improve identifying inflated volumes.
But, as CoinDesk reported last month, eyebrows were raised when Binance, which had been ranked 15 under the old system, moved to the top with a web traffic score of 1,000, the best possible.
CoinMarketCap has denied it favored its owner. Arguing the company was at the beginning of a major overhaul in its ranking system, the company said a balanced and accurate picture would emerge as more metrics came online.
Chan told CoinDesk at the time the "Web Traffic Factor is one of many factors that will be in the final iteration of the new ranking." This position was reiterated on Thursday when CoinMarketCap said the "Web Traffic Factor was only an intermediate step in the development of this comprehensive solution."
So, now that it's live, how does CoinMarketCap's fully-iterated rankings treat Binance?
Well, don't expect too many changes. The exchange page, which use the new algorithm, keeps Binance at the top of the table.
In terms of rankings for the largest markets: bitcoin, ether, tether, and litecoin – which comprise around 80% of total activity – Binance consistently takes the top spot.
Along with the high liquidity and volumes as well as a perfect web traffic score, CoinMarketCap has awarded, along with similar pairs for Coinbase and Kraken, a 100% confidence score: it has complete trust in Binance's data.
Speaking to CoinDesk, Chan reiterated that CoinMarketCap only provided neutral data and rankings and did not "update algorithms to suit anyone's agenda."
"CoinMarketCap continues to be run as an independent entity from Binance," she wrote in an email. Any changes to the methodology came solely from "our team's volition and understanding of what is best for the crypto industry."
"We will continue to be transparent when we update our methodology, without any preferential treatment for any exchange or project (even ones connected to our parent company!)," she added.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.