On July 23, 2020, the ranking of DeFi products on CoinMarketCap (CMC) came under heavy skepticism after temporarily listing Binance Coin (BNB) as the top DeFi token by market cap.
The data aggregation website recently introduced a new DeFi ranking section that lists the most popular altcoins in the booming sector. The section was added just months after the Binance exchange acquired CMC in April.
And now, there are growing concerns over whether the exchange will exploit CMC to bolster its native coin. The aggregator’s bias seems to have been confirmed when BNB topped the new DeFi section momentarily before CMC adjusted the rankings.
Folks in the crypto community have hinted that they expect favoritism from CMC after it fell into the control of Binance. For instance, analyst Jason Fernandes hinted that CMC could manipulate the newly published DeFi rankings. He tweeted:
“Tune in next week when Binance coin becomes the second biggest DeFi token.”
LINK Still Leads the DeFi Space
Today’s criticism comes just days after CMC faced skepticism for ranking LINK top of its DeFi category, prompting CMC Head of Research, Gerald Chee, to deny any idea that its rankings were fixed.
Indeed, LINK’s latest price surge has been accompanied by a provable rise in activity on its blockchain, suggesting that the token’s current price valuation is genuine.
Moreover, blockchain analytics firm “Into the Block” tweeted on July 19 that the number of transactions on the LINK network over $100K has increased 15x in 3 months while in BTC has remained boringly steady.
Vance Spencer, the co-founder of investment startup Framework Ventures, argued that much of LINK’s price surge could be directly attributed to heightened activity in the DeFi sector.
He added that the market cap for DeFi projects had grown tremendously in the first half of 2020. A significant portion of the ecosystem relies heavily on Chainlink for oracle functionality.
This analysis seems to justify the latest CMC data on LINK topping the DeFi section.
CMC Faces Growing Skepticism
CMC has often come under fire for continuing to list shady exchanges and illiquid altcoins.
For instance, a report by Bitwise in March 2020, pointed out that 25 of the 260 exchanges listed on CMC, more than 75% have been suspected of reporting fake volumes.
This has prompted some analysts to argue that until CMC applies a new model, retail investors and traders will likely continue to view its data with a heavy dose of skepticism.