Ranking Methodology Updated! New Metric Coming Soon

Ranking Methodology Updated! New Metric Coming Soon

3 months ago

Originally published on August 30, 2019.

Ranking Methodology Updated! New Metric Coming Soon

Table of Contents

Next Monday (Sep 2, 2019), we will be announcing a change in our ranking methodology to ensure cryptoassets will have fairer representation in the ranking when comparing across all cryptoassets.

Previously, we announced an expanded methodology that detailed the requirements that were factored into the listing (and consequently, ranking) process. As part of this push in July, we introduced an internal feature that would exclude cryptoassets from being eligible to be ranked in the Top 200 if they did not meet the criteria laid out in Section 10 of our methodology.

Due to the segmentation logic of this change, some cryptoassets that did not meet the criteria had harsher-than-intended rank drops. In extreme cases, a cryptoasset dropped 1000 ranks.

This new change that we will announce next Monday will fix and streamline the rankings so that all cryptoassets will be fairly represented in the rankings. This will continue to be congruent with the previously-published methodology.

To make sure this is clear, here is what the ranking segmentation will look like with this change:

  1. Ranks 1-200: Cryptoassets with a market cap, excluding cryptoassets that don’t meet the criteria in section 10, and excluding cryptoassets with low 24h volume.
  2. Ranks 201+: All cryptoassets with a market cap.
  3. Remaining Ranks: All cryptoassets without a market cap / with an unknown market cap.

Additionally, we would like to sincerely apologize for the confusion that was caused as an unintended result of the change. We value the input given to us by projects who professionally and amicably worked with us over email to support the change. Going forward, we will be extremely careful with any changes made on the site. We appreciate the feedback that has been provided, and have taken it to heart.

Addressing the issue of inflated volumes

As unveiled during our first DATA roundtable, we will be releasing new metrics based on liquidity to address the current concerns around inflated volumes. We recognize the limitations of using solely volume as a metric, and will be actively working to level the playing field with liquidity-based metric.

We have found any current solution on the market to be lacking, and hence, have been taking the time to create a statistically-provable and robust solution in contrast. There are a few issues with the solutions out there today:

  • Binary and incomprehensive: Some solutions simply exclude any exchange that they classify as “wash trading”, while keeping any exchange that they classify as “not wash trading”.
  • Includes other non-related metrics (e.g. web traffic): These metrics are not necessarily accurate or reflective of the breadth of use; while there may be some correlation between factors like web traffic, there has been no proof that the data is statistically significant in the context of volumes.
  • Easily-gamed (e.g. simplistic bid/ask and last done thresholds): These solutions can be easily gamed by anyone who knows the thresholds.
  • Lack of replicability: A bystander cannot purport to know how to differentiate fake and real volumes without access to account information.

Our stance, therefore, is to only release a metric that is objective and non-binary. It has to be data-driven, and include all relevant data points from all exchanges that are listed on the site.

Liquidity-based metrics will be launched on November 12, 2019

The new liquidity-based metric that we will release will have these attributes:

  • Numeric: Returns a nominal number
  • 24 Hr Rolling Average: Random time, regular interval polling of order book depth
  • Difficult to game: Dynamic polling depth based on liquidity of the cryptoasset
  • Cross Applicable: Applies to every cryptoasset as variables adapt to its liquidity

Ultimately, this “liquidity factor” will achieve the goals that we have stated above by being:

  • Fair: Level playing field for all
  • Objective: Metric is data-driven
  • Public Good-optimizing: Incentive for more liquid markets

Ultimately, this liquidity metric will factor into market pairs, and will be combined with other metrics that will go into the ranking of exchanges and projects. We are continuing to refine this based on feedback, and welcome more of your thoughts too.

We will release more information about this metric as we get closer to the launch date of November 12, 2019, at our first-ever conference, The Capital! Please remember to follow us here and on our channels for more updates.

Thank you once again for your patience and support, and we continue to be committed to doing our best for the industry.

3 people liked this article