CoinMarketCap Introduces Confidence Metric

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  • CoinMarketCap has announced several changes to the way their data is collated and reported, including a new ‘confidence’ metric
  • New metric is aimed at flagging suspicious trading volume on exchanges
  • Other changes include web traffic monitoring and combining all the ranking pages into one scrollable page

CoinMarketCap has announced a raft of changes aimed at improving the reliability of its site and assuaging the doubts of those who are worried by the recent takeover by Binance. These changes include a new ‘confidence’ metric aimed at making cryptocurrency trading safer as well as changes to other metrics, and come after an effort from the site to canvas opinions from users as to what they could do better.

CoinMarketCap ‘Confidence’ Metric to “Flag Suspicious Volumes”

The data site, the go-to cryptocurrency price and metrics site for years, has been working on improving the reliability of its data in recent months, and their new ‘confidence’ metric is the result of a recent campaign to garner feedback from users.

According to a blog post announcing their updates, CoinMarketCap acknowledged the need to “continue improving our measures to address volume inflation in an even more comprehensive way”. Rather than waiting for the “perfect solution”, the team has decided to implement the new ‘confidence’ metric which is designed to “flag suspicious volumes in market pairs of exchanges”, and would be calculated by combining a number of factors:

This indicator will be based on a machine learning algorithm that takes all the data we ingest — Liquidity Score (recently rolled out), Web Traffic Factor (recently rolled out), order book depths, time and sales — to determine if the volumes reported by exchanges are inflated, and to what extent. With this indicator, we hope our users will become better-informed about where they would like to trade.

Fake cryptocurrency trading volume has been a problem in the crypto industry for years, especially with the rise in alt coins and the explosion of smaller exchanges desperate for volume, and it is often impossible for traders to tell real volume from fake on data scraping sites.

Changes Could Win Back Boycotters

CoinMarketCap also announced other changes, including combining reported and adjusted volume into one single ‘volume’ metric, the removal of separate ranking pages into one scrollable page, the introduction of a web traffic metric for exchanges, and an improvement in the Liquidity Metric (now called Liquidity Score).

CoinMarketCap was purchased by major cryptocurrency exchange Binance in April for a reported $400 million cash and stock deal, raising doubts about its impartiality going forward. Many users have sworn to boycott the site, but with the company taking steps to improve the reliability of the data it provides, these users may well find themselves heading back there in the not too distant future.