Data company Nomics, backed by, among others, Coinbase Ventures, has announced the launch of a new service focused on “Transparent Volumes” on exchanges.
Nomics is an aggregator of cryptocurrency data and aims to build a transparent data infrastructure for the mainstream use of crypto-assets.
The so-called transparent volume represents the amount of volume considered by Nomics “reliable” and of high quality on the total trading volumes, to the extent that the company also presents it as the “reliable volume”.
In particular, this concerns the trading volume of a crypto asset that travels through transparent exchanges, to which Nomics has assigned a degree of transparency A+, A or A-.
For example, at the moment, bitcoin’s transparent volume is $1.98 billion, or only 16% of the total volume.
Nomics defines “transparent” those exchanges that provide granular data (at a commercial level) with a complete history, including data on all trading pairs, from the moment each of them has been listed.
In fact, it is well known that some of the volumes declared by certain exchanges are false, due to money laundering or other activities defined as “toxic”.
Nomics declares that their efforts to raise the level of transparency were inspired by Bitwise Investments’ report to the SEC of March 20th, 2019. Reviewing the report, Nomics revealed that of the ten exchanges rated as good by Bitwise, eight provide highly transparent trade-level historical data, and that only one of the exchanges rated as bad provides a limited history and virtually no granularity.
Exchanges would have every incentive to provide granular data with the most complete history possible because transparency attracts market makers and generates confidence in institutional traders, investors and regulators.
This transparent volume is important because it is much less likely to include trades resulting from money laundering or criminal activity. In addition, the transparent volume is verifiable, therefore subject to analysis and control.
Nomics argues that this data may also help the SEC decide whether or not to approve ETFs on bitcoin, considering that it is verifiable. This metric is designed to help institutions, public bodies and investors assess the percentage of the trading volume of a given verifiable and transparent crypto-asset.
Nomics launched its services in 2018 and is backed not only by Coinbase Ventures but also by the Digital Currency Group, owner of CoinDesk.
Nomics CEO and co-founder, Clay Collins, said:
“We currently list 3,873 assets on Nomics (2,502 of which are actively traded). The cutoff to be in the top quartile of actively traded assets in terms of percent transparent volume is around 1 percent. That is, if you have over 1 percent transparent volume for your cryptoasset, you’re in the top quartile”.
Among the top 10 cryptocurrencies per market capitalisation, only Binance Coin (BNB) has a transparency index above 30%, followed by Bitcoin and Monero. Whereas Bitcoin Cash and Bitcoin SV scored lowest among them, only 2%.