Over 125 million people rely on CoinMarketCap’s (CMC) data. They refer to the platform for live prices of cryptocurrencies and consider it a trusted source of information on all things digital assets. Lately, though, a considerable part of the crypto community has developed doubts about the legitimacy of the ranking algorithm that the platform employs.
The doubt and distrust in CoinMarketCap’s system arose after Binance acquired CMC. Soon after the acquisition, CoinMarketCap introduced a new default ranking metric that put Binance on the top rank from the 15th position. Additionally, the new algorithm also pushed top exchanges like BitMEX to the 175th spot on its exchange rankings list. Two premier derivative exchanges, Deribit and Bybit, have also faced the same fate, falling from the top ranks to spots in the range of 170s. The fall in rank is striking because these three exchanges facilitated over $3 billion worth of trades in the last 24 hours.
But after harsh criticism from the Bitmex community, CoinMarketCap was forced to readjust its rating mechanism.
CMC’s major algorithm change also impacted the way it ranked the top 200 coins. For no apparent reason, some cryptocurrencies took a massive dive.
XinFin Hybrid Blockchain (XDC) and Polkadot (DOT) were the worst affected by the change. In less than 24 hours, the rank of Ethereum co-founder Gavin Wood’s venture Polkadot (DOT) slipped to 2172. Even XinFin Network’s (XDC) rank fell from the top 100 to the 225th position in a single day.
As per the tweet of XinFin Network’s co-founder, Ritesh Kakkad, “No explanation has been provided by CoinMarketCap.”
Going by the community discussions, there have been no major changes with exchange volumes or trading pairs of XinFin Network’s token. But coin ranking of XDC suddenly changed and there has been no explanation by CMC yet.
One more coin, The DAPS Coin moved from the 176th position to 1,173rd in a single day. Even for this, CMC shared no explanation as to what caused DAPS Coin to fall by 1,000 positions.
There was, however, no impact on the rankings of other similar projects with less community support, lower project activity, and lower volume than XinFin Hybrid Blockchain and Polkadot. This made it even more difficult to understand the reason for the fall in the rank of major projects listed on CMC.
As per Coinmarketcap’s Metric Methodologies page, some indications include Liquidity Score (Market Pair, Exchange) and Web Traffic Factor (Exchange). Isn’t is a clear indication to forcefully tell projects to get listed on the Binance exchange to secure a position as one of the top 100 projects on CMC?
Alternatives to CoinMarketCap
As CoinMarketCap sneakily changes its algorithm to suit its biased motives, people are starting to see the reality. As that happens, alternatives to CoinMarketCap such as CoinGecko, CryptoCompare, and Nomics, have witnessed strong growth in previous months. It indicates that users are gradually abandoning CoinMarketCap as a trusted source for crypto projects-related information.
It’s highly likely that if CoinMarketCap continues to serve biased information to its audience, people would eventually find out. And the company may risk losing its market share. Given that the company relies on its traffic for advertising revenue, it may mean a terrible end for CMC.
The blockchain and crypto community has always been about decentralization of power. It has been about shifting away from a centrally controlled and biased system.
And as CMC tries to attain central control over how the community perceives certain projects by misrepresenting their credibility, it is up to us users to speak up against their actions and restore the values of the blockchain and crypto community. It is up to us to restore balance and make the industry as decentralized and neutral as possible. Otherwise, we may end up becoming another centralized industry that values personal and business bias more than real innovation.
Speak up. Now is the time.