New CoinMarketCap algorithm for exchanges: Binance still in the lead
New CoinMarketCap algorithm for exchanges: Binance still in the lead
Crypto

New CoinMarketCap algorithm for exchanges: Binance still in the lead

By Eleonora Spagnolo - 5 Jun 2020

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CoinMarketCap has configured a new algorithm that determines the ranking of exchanges. The result is that Binance, even with this change, is confirmed as No.1. 

This would be totally understandable were it not for the fact that Binance recently bought CoinMarketCap. Moreover, the crypto community had already expressed disappointment at the result of the previous ranking. 

The new ranking gives particular weight to a parameter called Web traffic Factor. Binance has a score of 1000 out of 1000, the highest of all its competitors. It should also be said that Binance is the exchange with the highest trading volume.

The novelty of CoinMarketCap’s new algorithm: the Web Traffic Factor

The factor related to web traffic takes into account a number of parameters provided by websites such as SimilarWeb, Alexa, Ahrefs:

  • Pageviews (20%)
  • Unique visitor count (15%)
  • Bounce rate (10%)
  • Time-on-site (5%)
  • Relative ranking (25%) – using Alexa’s relative ranking for all exchanges as data for this variable. 
  • Keyword searches (carried out by monitoring the positioning of exchanges on search engines for a series of keywords such as “cryptocurrency exchange,” “bitcoin exchange,” “cryptocurrency trading,” etc, 25%)

To these are also added new features introduced on May 29th, which are the ranking of market pairs and a Confidence indicator.

The fact that also in this case Binance ranks number 1, with full score, has not evaded the Internet. On Twitter, several users have commented ironically on the 1000/1000 score. Someone wrote that they abandoned CoinMarketCap after the purchase by Binance.

What users fear is that CoinMarketCap is influenced by the new owner. 

The CEO of Binance Changpeng CZ Zhao had already spoken on the subject and, while guaranteeing the independence of the teams that are part of the Binance ecosystem, he had indicated that the exchange has indeed bought the well-known cryptocurrency ranking site

However, CZ had also guaranteed that Binance ranking at No. 1 on CoinMarketCap was not a choice made manually, not excluding that, theoretically, the exchange might not rank first. 

In any case, the current ranking is not definitive. As explained also by CoinMarketCap on the blog, the algorithm on which the ranking is based will continue to be updated taking into account factors suggested by users and partners. 

At the moment, however, the new algorithm tries to provide the best service to users, as explained by the interim CEO of CoinMarketCap, Carylyne Chan:

“I believe that this new exchange ranking will provide our users with an accurate reflection of exchanges, as they are evaluated on a number of factors that provide a complete picture. Our machine learning algorithm will improve and adapt to volume, liquidity and changes in traffic over time”.

The ranking

In any case, Binance is in the lead, followed by Huobi Global and Coinbase Pro. As for the web traffic indicator, behind Binance are Coinbase Pro (972/100) and BitMEX (960/1000).

 

Eleonora Spagnolo
Eleonora Spagnolo

Journalist passionate about the web and the digital world. She graduated with honours in Multimedia Publishing at the University La Sapienza in Rome and completed a master's degree in Web and Social Media Marketing.

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