The cryptomarket data aggregator CoinMarketCap yesterday changed its methodology to rank exchanges by default web traffic, a figure that puts CoinMarketCap’s new owners, Binance, in first place.
But this is in stark contrast to the words of CoinMarketCap’s chief strategy officer and acting CEO, Carylyne Chan, who said in a podcast interview late last year that web traffic „was not a good indicator.
Introduced just six weeks after Binance bought CoinMarketCap for hundreds of millions of dollars, the new ranking methodology prioritizes web traffic over CMC’s carefully developed „cash figure“, which was only introduced in November and was to become the default ranking.
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When ranked by average liquidity, far from certain / several more competitors / square’s cash app / $20 million to $25 million / subsidiary in switzerland / securitize ready program / globally distributed ledger / creating the incentive / pulled its own support / has previously charged another individual ranks fourth, after Bitfinex, Coinbase Pro and Huobi Global, respectively.
Indications are not good
In an episode of the Blockchain Journeys podcast recorded at the Singapore Capital Conference in November, where the liquidity figure was introduced, Chan was asked specifically about the use of web traffic as a figure. She said:
„We’ve seen other people do things like you said, web traffic as a way [to verify that exchanges are legitimate], but people trade using API keys, so web traffic is not a good indicator.“
However, the CoinMarketCap blog post from May 13 has a very different argument:
„Since crypto currencies are a retail-driven market, for an exchange to have high volumes, it needs to have a large number of retailers (i.e. buyers and sellers). Instead of asking exchanges to submit their numbers of users, a good intermediate proxy will be web traffic. As such, we have designed the Web Traffic Factor in this iteration.“
The Web Traffic Factor is a combination score that provides different weights on: „page views, unique visitor count, bounce rate, time on the site, relative ranking, and keyword searches on major search engines“. This may answer some of Chan’s previous concerns.
After the original version of this story was published, Chan responded on Twitter: „If you read our post in its entirety, you’ll see that traffic is only *one of many factors* that will make up the final algorithm. I’ve said *more recently* that speed is imperative, so we’re iterating rather than waiting months. Faster = more feedback = better for users. Next iteration: End of May“.