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Key facts:
The new tool will be based on liquidity and not on the volume, as usual.The announcement is part of a series of initiatives launched at their conference in Singapore.CoinMarketCap, one of the pages market tracking cryptocurrencies with more popularity, announced the implementation of a new metric based on liquidity. The launch of the new tool was produced this 12 November in the framework of the conference the Capital, an event organized by the company, which is developed in Singapore.The new measure seeks to prevent their ranking of exchange houses and pairs of cryptocurrencies are affected by the practice of inflating the volumes reported. According to CoinMarketCap in a publication of its official blog, the inflation of volumes has increased in the last twelve months, with which such the metric “began to lose its purpose as a reliable means of measuring the interest real business”.It should be recalled that in the month of march of this year, CoinMarketCap had to recognize the validity of several researches on the volumes of inaccurate she was receiving from the exchange houses. Then, firms like financial Bitwise Assets Management, the Institute of Blockchain’s Transparency, and the startup, The Tie, reported that between 87% and 95% of the volume of transactions handled by the page tracking the market cryptocurrencies was inflated artificially by the suppliers.The release of CoinMarketCap points out that, despite the fact that the market came other solutions to the problem of the volumes inflated, these did not come to the root of the problem. Among them, he mentions the “manual selection of a few exchange houses ‘reliable’, or the use of metrics not related to web traffic,” said startup. As noted, these methods are not exhaustive.The metric of liquidity to replace the classification by volume of the exchange houses on the platform CoinMarketCap. Source: CoinMarketCap.The new metric aims to provide users with data on the markets that are more liquid, based on the follow-up of more than 3,000 criptoactivos. The metric of the liquidity of CoinMarketCap, currently in beta, will eventually replace the volume as an indicator of the default platform in order to classify the pairs and exchange houses of cryptocurrencies, says the press release.
Methodology
For the purposes of the new indicator of CoinMarketCap, the liquidity will be understood as the ease to enter or exit a criptoactivo, that is to say, buy it or sell it. As explained, for the monitoring of this indicator, the startup will take into account the increased number of variables within the order books. Between them points to three basic, such as the distance of the order from the middle price, the size of the order and the liquidity on the asset in question.The calculation will be pressing the state of a pair given at random intervals, during 24 hours, and averaging the results. To that end, we will take into account information such as the time zone differences in the global and the constant changes in the depth of the orders, as a result of market conditions.”We believe that our approach to adaptive it will make our metric is very difficult to ‘manipulate’, as orders would have to be placed near the average price, or they run the risk of being counterproductive to the score of the metric of liquidity,” said Carylyne Chan, director of strategy CoinMarketCap.