The crypto world’s most used cryptocurrency index, CoinMarketCap, has recently been under the line of fire lately for its protocols. Now, CoinMarketCap addresses issues, at least some of them.
It all started with Reddit…
We’re happy to announce our new subreddit! Please join the discussion at https://t.co/FQowKFktV5.
— CoinMarketCap (@CoinMarketCap) July 9, 2018
CoinMarketCap Adopts Reddit
The index just recently opened up its own subreddit of CoinMarketCap, most likely to address issues and discuss the potential fixes of the problems it has been facing.
However, starting a subreddit opens your company up to a whole new slew of potential bad press, as the site aggregates the comments all on one page where Reddit users can ‘upvote’ a problem.
hope you guys are ready for a whole new level of stupidity. crypto reddit is a monolith of monosyllabic mouth breathers muttering wen moon.
— ian thomas (@devil_in_tweed) July 9, 2018
Don’t say they didn’t warn you, CMC…
Four days ago, a user by the name of u/z0diac_me wrote a comment to the index addressing “fake volume” exchanges and zero fees.
The original subreddit post read:
“I think [CoinMarketCap] choose[s] the unhealthy model of exchanges doing their business for good and others—innovative one as for something bad […] I see a simple solution btw—let them fight that fake volumes against fake volumes, it creates the competition/drama, instead of improving that part of CMC—make something more valuable for your average users something like risk score system/indicators […] I can’t seem to find any logical reasons for CMC closing doors to something better than they really have now—money? They pay you for it?”
CoinMarketCap Addresses Issues: Data Transparency
This morning the index responded back to the subreddit, via its company blog, to clarify these issues.
CoinMarketCap’s post starts out describing that the index believes in “transparency and openness” in its data and as of July 16th, the site has removed the minimum volume requirements that were used to limit the number of exchanges on the site.
According to CMC, this move represents the first measure among many others that will be phased into the widespread concerns about the trade volume figures on the exchanges used in its index. CMC states that it transparently aggregates its volume data based on access to the exchanges’ APIs. The company acknowledges that there are several factors that have come up that compromise the volume’s accuracy.
CoinMarketCap explains that some exchanges have adopted a new “transaction fee mining” model that reimburses transaction fees in the form of native exchange tokens, like Binance Coin (BNB). Some speculate that this can pump volumes by making it profitable for users to simply trade back and forth to get more tokens.
This is mostly done by bots that automate the action. The company also addressed “wash trading” and the complexity of the problem. CMC will introduce more ways for users to filter data in the future. Also, it will provide its users with more metrics soon, such as 7-day and 30-day listings.
CoinMarketCap concludes the blog post by saying:
“Again, we want to state that our philosophy is to provide as much information as possible to our users, so that they can form their own conclusions and interpretations—and not introduce our own bias into that mix.”
CoinMarketCap addresses issues that many users have brought up, but is it enough? What do you think?
Featured Image: Depositphotos/© Kesu01