At CoinMarketCap, we believe in transparency and openness in our data. All the information that you see on our site is aggregated from hundreds of exchanges based on the APIs that they provide us. When we list exchanges, we do our best to verify with exchanges that the APIs they provide us will pipe through the freshest and most accurate data possible.

Volume concerns

In recent weeks, we have heard increasing concern around exchange volumes and rankings. There are three main concerns that have been brought to our attention, that have been skewing the perception of the data on the site, namely:

1. Fee-free/Transaction mining models

Transaction mining is a new model adopted by exchanges to rebate users with their own exchange coin when transactions are made. Essentially, coins are “mined” in the process of transacting, and all exchange fees are then refunded to the user. With a model like this, users are incentivized to trade back and forth in order to mine more coins, oftentimes with bots.

2. Low fee models

Some exchanges charge extremely low fees in order to encourage more trading activity. Often, these fees fluctuate, are tiered differently by account type (such as market makers or bots) and transaction volume, and are not obvious to the user or to us at CoinMarketCap.

3. Artificial volumes/wash trading

In order to ensure that their listings remain active on certain exchanges, sometimes projects are instructed to maintain a minimum level of volume. This causes projects to heavily employ market making services and bots to trade their own coin to inflate their volumes.

As you can imagine, the complexity of dealing with these evolving models is multi-faceted and deep. While we have a relationship with most of the exchanges listed on our site, there is no guarantee that any of them will respond or comply to any specific guidelines, but we have to continue showing users the best approximation of price and volume based on all the data we have available.

The evolution of new models such as transaction mining also means that there needs to be new ways to account for volume. Compounding it is the fact that they are, in fact, enabling greater liquidity in the way that users are trading more readily on the platforms.

Data transparency is top priority

Even though we try our best to verify the data with the exchanges on our site, we are not in the practice of censoring or policing others. In an open ecosystem like the one we are in, we believe that the best policy — that we follow closely — is to over-provide on data and let users make their own informed choices about what to do with that data.

However, we understand that these concerns are valid and have implications on the community and the impressions that people have about exchanges, even more than we are traditionally used to.

Previously, we had volume requirements for exchanges in order to filter for more popular exchanges that could be listed on CoinMarketCap. It was a necessary but not sufficient requirement, since we receive hundreds to thousands of requests a day to list new exchanges and coins. This was not meant, in any way, for us to introduce censorship, but rather for us to use a simple and easy-to-understand criteria for exchanges to figure out what they need to be on CoinMarketCap.

Due to the recent changes in the exchange landscape, and the concerns aired by our community, we have removed the volume requirement for exchanges. This went into effect on Monday this week.

The removal of the limit is partly to combat the impression that volume is the only requirement that is necessary for listing on CoinMarketCap. In fact, our team spends time researching new coins and exchanges to ensure that they are real projects, backed by real teams, and are not fraudulent, before putting them on CoinMarketCap. We are extremely conscientious about giving all exchanges and coins/tokens accurate representation on CoinMarketCap.

New features to clarify exchange info for users

Going a step further, we will be progressively updating our exchange rankings to be even more in line with our view that users should be given the power to experience and use the data in a way that fits their needs most.

CoinMarketCap will ensure that there are more levers and toggles that users can use to filter for the exchanges most relevant to them, such as those that they have accounts with, and look only for specific exchanges with attributes that are of interest, such as exchanges supporting transaction mining.

In this way, by introducing different ways to look at exchanges and their respective features, the ranking system will be able to take into account various expectations that users have and help them view and digest exchange information better.

Additionally, we will also introduce new metrics, such as 7-day and 30-day volume, and the establishment date of each exchange, so that users can use those as a way to evaluate for themselves the consistency of the volume on the exchange.

As you can probably guess from the challenges we have alluded to above, it is an extremely demanding problem that requires all our stakeholders in the cryptocurrency community to solve. We hope that as we all move towards expecting higher transparency from exchanges and projects, they will be able to join us in raising the standards for data veracity.

Again, we want to state that our philosophy is to provide as much information as possible to our users, so that they can form their own conclusions and interpretations — and not introduce our own bias into that mix.

We are open to your feedback as we collectively figure out best practices in identifying and rooting out issues with data. As always, we welcome you to make any suggestions or requests on our form. Our team reads each and every request, and will attend to them ASAP — Sometimes, it just takes a while because we get so many requests in a day!

Thank you for being fans and users of CoinMarketCap, and we look forward to having a constructive and productive conversation with you.

Originally published at blog.coinmarketcap.com on July 19, 2018.