For a number of years, CoinMarketCap (CMC) has been the industry’s premier analytics website for data on the top tokens and exchanges. There were a number of competitors but CMC was still the chosen source despite major discrepancies in the data it published.
CEO of the FTX derivatives exchange and Alameda Research, Sam Bankman-Fried (SBF) has opened a dialogue on whether the Binance acquisition has been beneficial to the website.
1) Unpopular take: @cz_binance partially saved @CoinMarketCap.
— SBF (@SBF_Alameda) October 4, 2020
The opening statement claims that Binance actually saved the analytics outlet but it has also strengthened its competition. Rival website CoinGecko has now caught up with CMC because of a reputation bias, claims SBF.
“A perception of bias did the damage. But there was also actual bias.”
He uses the example of Binance rival OKEx being ranked as 37th where in reality it is one of the world’s largest cryptocurrency exchanges. He continued to state that CoinGecko is a better product but CMC has improved a lot lately.
CMC data was highly questionable a year ago with 80% of the top exchanges being fake, SBF continued. Binance boss Changpeng Zhao has been critical of CMC data before deciding to buy the platform himself;
“Why do exchanges fake volumes? @CoinMarketCap is [the] highest traffic website in our space, and biggest referrer for all exchanges. Ranked high on CMC has benefits for getting new users. BUT at the expense of DESTROYING CREDIBILITY with pro users. Many forget the later part.”
SBF continued the narrative adding that CMC has improved and become a much better product in the seven months since the Binance acquisition. That said, competitors are also improving and the Binance bias is still somewhat prevalent on the site.
The bottom line is that Binance has an ever-increasing influence over the entire industry and appears to be attempting to become the Google of crypto. Its recent foray into DeFi and plugs of any project audited or not, that chooses its Smart Chain over the industry-standard Ethereum is another example.
CMC may have improved recently but it is still owned by the largest centralized exchange on the planet so that partiality is still likely to be lurking.
Commenting on the matter was the CEO of Binance, Changpeng Zhao, who said:
Interesting thread. No much we can do about perception. There is a lot we (@CoinMarketCap team) can do about improving the product.
I also promote other info sites like @coingecko. We need more products/teams in the space.
Still early days. https://t.co/PolXkT2OWO
— CZ Binance (@cz_binance) October 5, 2020