Binance’s Purchased CoinMarketCap Removes Binance’s Fake Volume Data
Binance’s Purchased CoinMarketCap Removes Binance’s Fake Volume Data.
by Crypto cryptographic data provider coinmarketcap by stock building, at 400 million, according to rumors you’ve purchased immediately after; changed the stock market ranking system. In the new system, Binance is now in the first place and the numbers showing the “wash trading” action that the stock exchange has applied to show false volume have been removed.
The new system sorts the stock markets by web traffic. “Instead of asking exchanges to send their user numbers, it will be a good tool, web traffic,” says CoinMarketCap. This metric, which is now used to rank exchanges, has carried Binance to the top with 1,000 points ; followed by Coinbase Pro and BitMEX.
We listened. @coinmarketcap updated exchange rankings by incorporating web traffic factor. Checkout the update rankings at URL below and let us know what you think.https://t.co/00jEVwiC6c https://t.co/WGmyM0MkCj
— CZ Binance ??? (@cz_binance) May 14, 2020
“It’s time to listen to the community,” said Binance CEO Changpeng Zhao on April 22. Would you like to see what has been improved, added or removed at CoinMarketCap? ” he tweeted.
Yesterday he said, “We listened. CoinMarketCap updated the stock market rankings by adding the web traffic factor. Check out the updated rankings from the URL below and let us know what you think, ”said another tweet.
When asked if Zhao’s involvement in the decision-making process, CoinMarketCap’s strategy manager, Carylyne Chan, said the platform was independent. “We used CZ’s Twitter as a channel to collect feedback. It’s part of our research process, ”he said.“ We don’t change our algorithm or update rankings in line with anyone’s agenda. It would be against CoinMarketCap’s history and value, ”he added.
Binance with new metric takes first place in CoinMarketCap
However, as CoinTelegraph reported, Chan said in an interview last year, “We saw other people use web traffic to verify that the exchanges are legitimate, but people trade using API keys, so web traffic is not a good indicator.”
At this point, Chan said, “We still don’t believe web traffic is the right metric for everything. As we mentioned in our blog post, web traffic is just one of the many factors we use to provide a better adjusted volume metric for our users. ”
CoinMarketCap lifts “wash trading” indicator
However, the data platform has not changed its attitude towards using web traffic, it has removed the indicator it has created in July 2018, designed to provide more accurate data – the “wash trade” indicator, one of the manipulation methods used to display counterfeit volume in the stock market.
Chan, who was at the head of the marketing department at the time, emphasized in a blog post that the three issues CoinMarketCap is trying to solve are mining transfer fee, low fee models and artificial volumes / wash trading.
The day after Binance bought CoinMarketCap, on April 3, the stock market was ranked 15th. The data provider listed Binance’s stock market volume at $ 6.7 billion. However, its “adjusted volume”, a metric designed to remove suspicious activities, was $ 2.1 billion.
CoinMarketCap explained: “With the corrected volume, the volume amount can be seen, with the exception of what is thought to be incorrect or suspicious. Therefore, you can think of the corrected volume as a way to present the data more finely, and you can think of the reported volume as the volume data that exchanges provide directly to us through their APIs. ”
However, this metric is no longer available. The original metric, including wash trading and “potentially suspicious” data, was the only remaining criterion. As such, Binance ranked top.
At this point, Chan said, “You are wrong about the premise of corrected volumes. Our corrected volume metric removes volume from free or non-trading mining markets; it also removes the volume in derivative transactions. This has nothing to do with questionable trading activity. ”
Why is it important to be on top?
The upper part of the stock exchange comparison sites is important for the stock exchanges. A Bitwise report indicates that 95% of the stock market volumes are fake; They claimed that they used wash trading to inflate their volumes and increase their rankings.
Stock exchanges also use various ways to increase their volumes. For example, according to a report by BeinCrypto, a student in Moscow demands $ 15,000 in exchange for a bogus trade volume. In addition, some exchanges pay to be listed in the sponsored sections above the stock market rankings, rather than inflating their volumes to reach the top.
Basically, it is very important to be on top; because it makes the brand look like the most popular stock market and can attract new customers. These new customers not only pay trade fees and withdrawal fees, but also increase their trading volumes – the stock rankings get higher and more customers come. An efficient vicious circle.