One of the biggest issues facing the legitimacy of the entire cryptocurrency space has to do with how the volumes and data is reported. A damning report came out in 2019 that outlined that as much as 95 percent of trading volume is being faked, and this plays havoc with investing and the trust investors have in the space.
Coinmarketcap, one of the most popular data sites for information like trading volume, was at the centre of some of the controversy as much of its data was found to be inaccurate. This has led both Coinmarketcap and other sites to try and address the fake volumes.
With the recent news that Binance had acquired Coinmarketcap, a lot of concerns were raised, but the new parent company and major exchange took to the community to ask what changes needed to be made to the site, and unsurprisingly, trading volume was brought up.
This has prompted the site to announce it will be making ongoing improvements to combat this volume inflation.
“Our team is continually researching and designing new metrics to empower our users with the tools to make informed decisions on which exchanges to trade on,” Coinmarketcap explained.
“Rather than wait for the perfect solution, our team has decided to take an iterative approach. We will be rolling out new metrics and improvements across multiple phases. This way, we can monitor how well each iteration addresses our users’ concerns, and adapt more optimally for the next iteration.”
Some of the new measures being taken include improved liquidity scores, a new web traffic factor, One page to rank exchanges, instead of multiple pages, and an algorithm to detect outliers in reported volumes.
The site explained:
“We are focused on improving the Liquidity Metric to be more useful for our users. In this improved version, instead of a Metric, we have developed our Score, which helps our users find exchanges with the least slippage and prioritizes order sizes most relevant to our users.”
“Instead of asking exchanges to submit their user numbers, a good intermediate proxy will be web traffic. As such, we have designed the Web Traffic Factor in this iteration. It takes into account an extensive range of data points, including pageviews, unique visitor count, bounce rate, time-on-site, relative ranking and keyword searches on major search engines,”
“In this new version of the exchange ranking page, instead of having multiple pages, we are folding them into one single page. This page will be sorted by the new metric, Web Traffic Factor, by default, while preserving the other metrics”