There are several criteria used to rate cryptocurrency exchanges; these ranging from security of the platform, liquidity, customer support, volume of trades and of course the number of users. While it is debatable which of these the best index is, a notable blockchain research firm has released a ranking of crypto exchanges based majorly on their user base.
Blockchain Transparency Institute, this week, published its global ranking of cryptocurrency exchanges and as expected, it featured some of the well-known crypto exchanges.
Binance Named Biggest Cryptocurrency Exchange
The top spot was, however, reserved for Binance crypto exchange as it was adjudged biggest trading platform. The exchange topped the list with an average of about 160,000 thousand daily users and a 24-hour trading volume of just over $1 billion.
Binance beat all other exchanges not only in the number of daily users and trading volume, but also in other areas including the number of mobile users, total active users, and volume to visitor ratio.
Coming at second place is OKEx crypto exchange which managed 105,609 total active users and a 24 hour trading volume of about $694 million. Other exchanges that completes top 10 on Blockchain Transparency Institute’s global ranking are Huobi, Bitfinex, Bithumb, HitBTC, Upbit, Kraken, Coinbase, and BitStamp.
The CoinMarketCap Influence
In comparison with their positions on Coinmarketcap.com, only the top three (that is Binance, OKEx and Huobi) maintained their positions on both rankings. CoinMarketCap has become the go-to site for statistical data on cryptocurrency and crypto exchanges. A previous research by Blockchain Transparency Institute showed that many exchanges were getting around 80 and 90 percent of their referral web traffic from the site. This the researchers say has led exchanges to use wash trades to boost their trading volumes and rankings on the site.
Exchanges Exploit Token Issuers
Another outcome of the CoinMarketCap influence is that these exchanges exploit projects whose token still has a low market cap, charging them between 5 BTC and 60 BTC to get them listed on their exchanges. It is a common believe that listing on a major exchange—ranked among the top on CoinMarketCap—greatly improves the recognition of the token. These projects which are desperate to get recognition usually follow through with the arrangement in order to benefit from the exchange’s traffic. The report explains:
“…this also involves supplying the exchange with a large amount of tokens which are then used to massively inflate volume numbers on CMC [CoinMarketCap], luring in prospective traders from other exchanges with much lower, but real volume.”
As Smartereum reported earlier, an analysis conducted by Coinmetrics in July showed that more than half of transactions on cryptocurrency exchanges did not have economic value. The data analysis provider argued noted that manipulated trades, coin mixers, and mining disbursements contributed to the inflated trade volumes. Another analysis on trading books of crypto exchanges by Sylvain Ribes claims to uncover about $3B worth of faked cryptocurrency volumes, accusing OKEx of falsifying more than 90 percent of its volume.
Fighting Against Fake Trade Volumes
Crypto operators are rising to the challenge of fake transaction volumes. Binance seems to be taking the lead as it announced that it would channel all revenue it receives for token listing to charity. This way, it removes the main motivation for wash trades.
On its part, CoinMarketCap have also made efforts to improve the accuracy of trade volume data on its platform. As Smartereum reported, the crypto data site introduced an adjusted trade volume algorithm to filter away fake trade volumes. This accompanied changes to the website look, its API, and other new features.