Cryptocurrency data aggregator CoinGecko’s Trust Score feature is a very effective one. Although, The feature was launched in May 2019, it has helped CoinGecko to combat fake trading volume. Poloniex is 5th most trustworthy exchange as per the List.
As it is said, in traditional markets, exchanges with high volume equate to high liquidity. However, crypto markets, the scenario is quite different. The exchanges involve in miscellaneous exercise to inflate the trading volume data.
CoinGecko’s trust score algorithm takes into account exchanges’ reported trading volume, web traffic, and order book depth. Moreover, With “Trust Score” in action, the list of top exchanges changes dramatically as the algorithm prioritizes exchanges with tight spread and deep depth, rather than purely by volume. Further, This makes trading volume manipulation much less attractive to exchanges, and puts focus back onto what matters to the traders – liquidity.
Further, The platform plans to add more metrics to the Trust Score to increase the feature’s credibility. The feature looks forward to add the following data in coming months –
- Trade history analysis
- API quality analysis
- Cyber-security analysis
- Hot & Cold wallet analysis
- Social Media analysis
- Exchange support turnover time
- User Reviews
- Licensing & Regulations
Additionally, the competitor of CoinGecko, CoinMarketCap has added a Liquidity metric to its tracking tool. Both, Trust Score and Liquidity metric are in its Beta phase.
Top Exchanges as per CoinGecko Trust Score
As per the report, the top 5 exchanges this week are Binance, Bitfinex, Kraken, BW.com and Poloniex. The Poloniex exchange has climbed a step higher and reached 5th position. Further, Poloniex has scored full points on the trust factor. The team got on to twitter to announce this news.