Cryptocurrency data provider CoinMarketCap has launched a new metric dubbed “Liquidity,” aiming to combat fake trading volumes.
Announcing the news on Tuesday, CoinMarketCap said the new metric replaces “Volume” and serves as the default standard for ranking cryptocurrency pairs and exchanges on its website.
The Liquidity metric looks at several factors, including order-book depth changes and distance from mid-price. Calculations are made by polling the market pair at random intervals over 24 hours and averaging the result.
“We believe our adaptive methodology will make our metric very difficult to ‘game’ as orders would need to be placed close to the mid-price, or risk being counter-productive to the Liquidity metric scoring,” said Carylyne Chan, chief strategy officer of CoinMarketCap.
Earlier this year, CoinMarketCap was criticized by cryptocurrency asset manager Bitwise, which said the data provider ranks exchanges by volumes and nearly 95% of cryptocurrency trading volumes are fake.
Before and after
The Liquidity metric has gone live with rankings of market pairs and top 50 exchanges. Notably, it shows that Singapore-based exchange CoinBene, which was ranked at the top for 24-hours volume figures, has been replaced by Binance during the same period, with the Liquidity metric. CoinBene had $1.2 billion worth of trades, while Binance just over $600 million.
“With our Liquidity metric, we hope to provide public good to the crypto markets by encouraging the provision of liquidity instead of the inflation of volumes,” said Chan. CoinMarketCap first revealed the Liquidity metric in August.
The firm has today also launched a jobs page, where companies can list job openings and people can search for new opportunities. The page shows that CoinMarketCap charges $699 for posting 5 jobs.