Ongoing Improvements to Combat Volume Inflation
Publikováno: 13.5.2020
Hi CoinMarketCap users, Over the past few weeks, we have been actively soliciting and reviewing feedback from our community (suchContinue Reading
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Hi CoinMarketCap users,
Over the past few weeks, we have been actively soliciting and reviewing feedback from our community (such as through our #RoastCMC campaign). Based on the feedback since we launched our Liquidity Metric last year, and based on the recent feedback we’ve received (our top-rated comment is about real volume 
), it is clear that we have to continue improving our measures to address volume inflation in an even more comprehensive way.
On that front, our team is continually researching and designing new metrics to empower our users with the tools to make informed decisions on which exchanges to trade on.
Rather than wait for the perfect solution, our team has decided to take an iterative approach. We will be rolling out new metrics and improvements across multiple phases. This way, we can monitor how well each iteration addresses our users’ concerns, and adapt more optimally for the next iteration.
For starters, here is an outline of our latest initiatives in this phase of iteration:
Improved Liquidity Score rolled out on May 8, 2020
As previously discussed in our letter to our users, we are focused on improving the Liquidity Metric to be more useful for our users. In this improved version, instead of a Metric, we have developed our Score, which helps our users find exchanges with the least slippage and prioritizes order sizes most relevant to our users (i.e. in the range of $100 – $10,000, rather than, say, 50 BTC). In essence, we distilled liquidity into a single, intuitive score of 0 – 1,000 for our users to easily compare exchanges and markets. Here is a simple user guide and an in-depth look at the Liquidity Score.
New Web Traffic Factor (coming May 14)
In most cases, with crypto being a retail-driven market, for an exchange to have high volumes, it needs to have a large number of retail traders (i.e. buyers and sellers). Instead of asking exchanges to submit their user numbers, a good intermediate proxy will be web traffic. As such, we have designed the Web Traffic Factor in this iteration. It takes into account an extensive range of data points, including pageviews, unique visitor count, bounce rate, time-on-site, relative ranking and keyword searches on major search engines. More details about our methodology can be found here. We are aware that web traffic will not provide the full picture, as there are traders who trade using API keys, for instance. This metric is, as shared above, an intermediate step in this iterative process.
One page to show top 100 exchanges, instead of multiple pages(coming May 14)
Another common area of feedback is to improve the user experience, especially around scrolling or navigation. In this new version of the exchange ranking page, instead of having multiple pages, we are folding them into one single page. This page will be sorted by the new metric, Web Traffic Factor, by default, while preserving the other metrics (e.g. Liquidity Score, volumes, markets) in the subsequent columns — all within the same table, and with the charts and volume numbers you are already so fond of! If you prefer to sort the rankings by a specific metric, you can simply click on the respective column. This is part of our ongoing effort to make our information more user-friendly and easy-to-navigate.
Algorithm to detect outliers in reported volumes (coming May 29)
The largest concerns that our users have over the data presented on CoinMarketCap are the high inflated volumes that exchanges report. In order to comprehensively address this issue, we have gone to the drawing board to understand the key drivers for volumes: traders and liquidity. The newly designed algorithm takes all the data we ingest — order book depths, time and sales, web traffic variables — and through machine learning determines if the volumes reported by exchanges are inflated, and to what extent. With this information, we will be able to flag errant exchanges and inform our users better.
Keep the feedback coming as we roll out these improvements! In the mean time, we prepared a few FAQs that may address further questions that you may have.
Frequently Asked Questions (FAQs)
- Can these new metrics be easily gamed or manipulated by errant exchanges?
We incorporate numerous variables in each algorithm so that it cannot be easily exploited. In the case of the improved Liquidity Score, we track various order sizes over a large range of order quantities from $100 to $200,000 instead of a single order size. This prevents errant crypto exchanges from achieving a high liquidity score by simply putting enough liquidity at a defined spread to achieve the score that they wanted.
Likewise for our Web Traffic Factor, it hinges not only on page views or visitor count. Instead, it incorporates more behavioral data points like bounce rate and time-on-site, which are important for distinguishing between real traffic and bot traffic. We also take into consideration relative ranking and keyword searches that indicate organic traffic than just looking at overall or direct traffic.
- How often do you plan to update or upgrade your metrics?
We are constantly monitoring the performance of every new metric that we roll out, watching for erratic outcomes and soliciting feedback from our community of users and partners. Based on the feedback we receive, we will roll out updates as frequently as we can in response. As you can see from our plan above, you can safely assume that there will be constant, iterative updates!
- Will there be an overall metric that incorporates all the aspects (e.g. web traffic, volume, liquidity, markets etc)?
That is the plan, to simplify our metrics for new users who want to get the information at a glance. Currently, we provide options for different metrics so that our users can make their own informed decisions, depending on what they consider most important, and will continue to make that information available in the future. We are working on the UX/UI designs to make it easier to filter and sort for the attributes that you care about — it will be rolled out throughout this iterative process.
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