Exclusive: Is CoinMarketCap Really Fighting Against Data Manipulation?

By Matthew Lam   Apr 26, 2019 3 Min Read

Exclusive Interview with Mauvis Ledford: Part 1

In the world of cryptocurrency, how do we protect data integrity when the data can be easily manipulated by crypto exchanges? As the leader in providing cryptocurrency data services, Mauvis Ledford (the CTO of CoinMarketCap) shared with us on how CoinMarketCap dealt with complex situations in cases of Trans-fee mining exchanges, decentralized exchanges and situations when coin faced widespread delisting.

Mauvis Panel.jpgMauvis expressed his view in the panel “The Intrinsic Value of Cryptocurrencies”.

How does CoinMarketCap protect data integrity? The trading volume of some crypto exchanges can be highly manipulated, especially the ones using Trans-fee mining model?

CoinMarketCap is a data source provider and we provide adjusted data, reported values as well as raw data. Our job is to collect the information from the exchanges that are reported and we provide that to our end users. We try not to make too many judgments by ourselves. Yet we do recognize that this is an industry wide issue that we are doing a number of things internally to address. We're not only adding additional rating systems, but also planning to add a lot more to get a more holistic view of exchange’s trading volume. Basically, we want our end users to be able to make their own judgment. We have a lot of stuff in the works. We've talked to many crypto leaders about the issue and we do plan to react.

Blockchain Life Asia Mauvis.jpg
Mauvis delivered his keynote in Blockchain Life 2019, "According to CoinMarketCap, Data for an increasingly crypto-curious world".

What are the adjustments on coins that face delisting like BSV?

Because we use volume weighted averages, it doesn't really change anything on our side. We still collect the information about every cryptocurrency trading pairs on various exchanges. If the coin gets delisted on an exchange, we are still aggregating all the other 250 exchanges that we collect data from, nothing really changes on our side. If every single exchange delisted a particular coin, then it would also be removed from our system as well automatically.

How do you ensure the data accuracy in decentralized exchanges? Any technical challenges in data collection?

As long as an exchange has an API for us to retrieve the data, we can connect up to it. It doesn’t matter whether the exchange is decentralized or not. As we have more and more decentralized exchanges, our techniques may change, but generally speaking, if the decentralized exchange has API that had reported the trades and other values that we can pull, then we can treat it just like any other exchange.

In 2019, there is surging demand for IEO that we can foresee many tokens will be listed via this new fundraising method. How would it affect CoinMarketCap in data collection? Will it be easier or there will be more technical challenges?

It's exciting future for how exchanges are going to be in the future, even Binance is doing its own decentralized exchange (DEX). As long as these exchanges have API that we can download that information, it's not going to make a huge difference to us. We have developed the robustness in collecting data from all the exchanges and this is just another way to download that data and provide the same volume weighted averages with that.

About the author

Matthew Lam   
I believe the true value of cryptocurrencies is the underlying blockchain technology. The development of CBDC, DeFi, blockchain standardization are the key trends to watch in 2020!

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