Coincidentally, perhaps, Binance absolutely aced these new rankings. It achieved a perfect web score factor – 1,000 out of a possible 1,000 – which means CoinMarketCap believes 100% activity on Binance is human. In comparison, close rivals Coinbase Pro and Kraken achieved a web score factor of 972 and 856, respectively.
CoinMarketCap’s new metric focuses on web traffic. In a blog post this week, the price site – which received nearly 29 million visits in April – argued metrics including page views, time-on-site and bounce rate were a “good intermediate proxy” for determining how much of an exchange’s activity was actually human.
A month on from Binance buying CoinMarketCap for a rumored $400 million, the crypto price aggregation site has unveiled an exchange ranking system that gives its new owner the best score possible thanks, in part, to the CEO’s Twitter feed.
“We listened,” said CoinMarketCap’s new owner, Changpeng “CZ” Zhao, tweeting the news out on Thursday. He was referring to the fact many traders had expressed concerns about exchanges artificially inflating volumes so they seem more prominent – known as wash trading. “Now, I can finally have a clear view of the field and see who the real upcoming exchanges are, lol.”
Decrypt reported Binance had been ranked 15 under CoinMarketCap’s old exchange metric system. While the previous system had shown adjusted volumes, which excluded potentially skewed or suspicious data, the new rankings only show volumes supplied by the exchanges themselves.
On this metric too, Binance comes in first place, with reported volumes at just under $8 billion in 24 hours, with both Kraken and Coinbase’s volumes at roughly $450 million per day.
“This exchange ranking is much more useable now,” Zhao said in a follow-up tweet, adding they’ll seek to better hone the new exchange ranking going forward. CoinMarketCap’s blog post said the site is also designing a new algorithm that would use liquidity and orderbook depth to better detect disparities between actual and reported volumes.
CoinMarketCap was previously against the idea of using web traffic for ranking. Chief Strategy Officer Carylyne Chan had said in a podcast late last year, when it was still an independent firm, that web traffic was “not a good indicator” as many traders use API keys, which obfuscate data collected.
Chan, who is now CoinMarketCap’s acting CEO, said on Twitter earlier Friday that web traffic would be “only *one of many factors* that will make up the final algorithm. I have said *more recently* that speed is imperative, hence we’re iterating instead of waiting months.” Emphasis hers.
Talking to CoinDesk, Chan said, “We have been updating our ranking metric over the last year, as evidenced by our ongoing work with Liquidity Metric and Liquidity Score … In this update, we have also explicitly stated that Web Traffic Factor is only one of many factors that will be in the final iteration of the ranking.”
CoinDesk asked Chan if Binance had been involved in the decision to alter the ranking system. She said the site “used CZ’s Twitter presence and feed as a channel to gather feedback.” However, it was one of various inputs into the ranking methodology improvement process, which also included customer surveys.
Some crypto traders aren’t happy about the change. Mati Greenspan, founder of Quantum Economics, tweeted earlier Friday that Binance had “abused” its CoinMarketCap acquisition “to manipulate the rankings.” Sam Bankman-Fried, founder and CEO of FTX Exchange, which received an undisclosed investment from Binance in December, said the new web traffic score “leaves something to be desired.”
Zhao said last week Binance wanted to keep CoinMarketCap independent. Speaking at the recent Ethereal Summit, he said the money spent acquiring the exchange meant Binance has an incentive to protect its neutrality.