CoinMarketCap Algorithm Changed: Is The Ranking Flawed?

CoinMarketCap ( CMC ) has over 125 million people relying on its data as a reference point price and trusted informant of information on cryptocurrencies. recently, CMC underwent a major algorithm exchange that impacted the way that the top 200 coins are ranked. For no apparent reason, some cryptocurrencies took a massive prima donna.

DAPS Coin was the worst affected by the exchange. Adel de Meyer, the CEO of DAPS Coin woke up this weekend to discover that DAPS Coin shifted out of situation 176 to place 1,173 in a one day. No explanation has been provided by CoinMarketCap as to why DAPS Coin had dropped about 1,000 in rankings .

Adel De Meyer
In electric shock, de Meyer posted a video recording sharing her thoughts on Twitter which has already received close to 10,000 views. I reached out to de Meyer to find out more data and here ’ second what she had to say .

Question: What happened to DAPS Coin?
Adel de Meyer: not excessively long ago, CoinMarketCap made some changes to their algorithm. suddenly, without any admonition, DAPS dropped over 1,000 in its rankings. nothing has changed for DAPS to have fallen that low .
early projects have less market cap, project bodily process and book than DAPS, but yet their rankings were n’t impacted. Because of this, I could not understand why CMC decreased our position by this much. This is why I conducted an probe and shared my findings on Twitter—the answer was identical supportive .
Question: What do you think about the requirements for the top 200 coins on CoinMarketCap?
Adel de Meyer: In my impression, the requirements are obscure and loose to interpretation. There is no authoritative method by which one can department of state that if the requirements are fulfilled, you will be ranked appropriately. Their direct rival CoinGecko has its methodology published publicly, so it gives projects a fair and equal chance to rank better for their project ’ south visibility and credibility .

CMC states that one of the ranking factors is “ significant liquidity/trading action with normal bid-ask spreads across sufficient sources of market data. ” This motivates wash trade to comply with this requirement. so if one exchange number falls humble on liquidity, it is up to the project to employ market makers to ensure “ convention ” bid-ask spreads across the board .
This does more damage than good to innovation, startups and the overall emergence of the cryptocurrency diligence. For the top 200 rankings, they besides use something called Indices. “ The CoinMarketCap Indices are a cortege of benchmark indices designed to be the most comprehensive examination in the market, measuring the performance of the crown 200 cryptocurrencies by market capitalization traded in USD. ”
The methodology principles state of matter that “ all eligible cryptocurrencies are ranked by their current market capitalization. ” To me, this is confusing because the grocery store ceiling is not what CMC ranks you with any more .
Question: Can you explain what safekeeping is? 
Adel de Meyer: Safekeeping is synonymous for sediment or security. Some of the bigger exchanges require a typeset measure of money ( some up to 1 million dollars ) that you guarantee for a class to use and trade in font your bulk drops. Exchanges will do this to maintain volume and not damage their reputation. That ‘s because exchanges want to show “ volume and activity ” for each coin.

This is chiefly, due to the exchanges wanting high rankings on CMC to attract users and fresh listings. Crypto exchanges can demand huge list fees when they are perceived as the biggest with the “ most volume. ” Rumors have been going about, speculating that some crypto exchanges are paying for higher rankings. If this is indeed happening, then this practice is completely unethical .
Question: How does the CoinMarketCap decision impact the blockchain community?
Adel de Meyer: This is a fundamental topic for multiple reasons :

  1. CoinMarketCap requires that a coin must be listed on one or more of their spouse exchanges, and these exchanges are centralized and regulated. These two things are in direct conflict with the tenets of crypto and the purpose for the universe of bitcoin .
  2. If it is proven that CoinMarketCap can manually adjust the ranking of a project, then they can not categorically express that they are a neutral third party .
  3. centralization of a rank authority is immediately baffling, not alone does that go completely against the tenets of the industry, but this besides means that there is the option for collusion, corruption, and coercion .
  4. A ranking assurance with the size and reputation of CoinMarketCap has the capacitance to basically “ obscure ” a plan at will .
  5. There is a lack of foil for the acme 200 rankings. CoinMarketCap claims that they don ’ deoxythymidine monophosphate publish this to avoid handling .
  6. Coinmarketcap created FUD ( reverence, uncertainty, doubt ) in hard-working projects by decreasing their rank by up to 1,000 rankings overnight without a plausible explanation. This leaves investors and traders confused, therefore damaging the reputation of projects .
  7. The ICO Envion which was creditworthy for stealing 90 million dollars was ranked at 191 on CoinMarketCap until I tweeted about it this week. After which, their ranking on the spur of the moment dropped to 1,174. This type of flaw ranking is dangerous and poses a risk to new inexperienced investors in the cryptocurrency diligence. This project should have been removed completely as per “ CoinMarketCap Delisting Policy. ”

Question: Are there any new interesting developments at DAPS? 

Adel de Meyer: Our code is presently undergoing a security audit by Red4Sec who is long-familiar for work with other large projects like NEO. We besides equitable returned from Canada ’ s largest blockchain event called Futurist, showcasing how DAPS Coin is competing in the privacy mint space. last, we ‘re planning for the launch of our mainnet, which we are pretty excited about—that will launch at the end of September 2019 .

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Category : Crypto News

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