Hacken, the whitehat community, reveals its first exchange assessment index called the CER, Crypto Exchange Rates.
The objective of this index is to give a complete assessment of the exchanges, their efficiency and their security.
We try to analyze which are the relevant factors considered for this assessment.
Let’s start from the consideration that there are currently about 190 exchanges in operation, so it is essential to have indications about the efficiency of each one.
Hacken identifies the following factors as relevant in the assessment of an exchange:
- liquidity, defined as the volume of transactions;
- clarity in the values of the quotations;
- the presence of a ‘Kitchen dealing centre’, i.e. an over the counter market (OTC), and its transparency;
- the possibility of arbitrage trading;
- quality of the KYC and AML procedures;
- level of regularity and legality of the Exchange;
- ease or limitations of the cryptocurrency or token collection process;
- transparency of information to the public;
- cybersecurity and technical and infrastructural security
CER wants to continuously analyze the data 24/7 to be able to give a continuous evaluation of the characteristics of the exchanges and create its own index.
Unfortunately, the project is not yet complete, as the phase related to the analysis of the technical and infrastructure components of the exchanges will only be operational in September, while the other components are already operational.
A further major initial limitation of CERs is the very limited number of observed exchanges.
Indeed, so far the analysis is limited to: Okex, Bitfinex, Binance, Gdax, Huobi, Kraken, Bitstamp, HitBTC, Poloniex, Gemini and Upbit.
There are 11 exchanges out of 190, with major shortcomings (like Korbit) and that risks being polluted by processes of purchase or merging operators. However, this is a first step in creating a more transparent market for cryptocurrencies.