Ripple, the American tech company behind the Ripple payment protocol, has announced that it will start using CryptoCompare’s Top Tier (CCTT) list of exchanges for its trading volumes reports.
Ripple will be using exchanges that, according to CryptoCompare’s Exchange Benchmark, have a grade of at least “B,” as the company believes the list offers a complete perspective on the quality, management, structure, and regulatory environment of exchanges – effectively helping filter out fake trading volumes.
The blog post notes that CCTT is “in line with what Ripple believes to be more accurate XRP trading volumes.” Last month the company shared that its sales of XRP in the second quarter of this year would be lower as a percentage of reported volume because of misreported and inflated trading volumes across exchanges.
Charles Hayter, co-founder and CEO of CryptoCompare, noted that the firm is delighted to have been selected by Ripple as its trust volume benchmark for cryptocurrency exchange trading activity, and added:
We recently created the CryptoCompare Exchange Benchmark in order to address industry concerns over inflated volumes. Ripple’s selection of our Benchmark product as the more accurate source of legitimate trading volume underlines the value of our analysis based on granular trade and order book data, rather than aggregate volumes. We look forward to continuing to work with the industry to increase transparency and confidence in the digital asset class.
Fake Volumes and CryptoCompare’s Exchange Benchmark
CryptoCompare’s Exchange Benchmark was launched in June of this year, in response to growing concerns surrounding fake trading volumes. Some analysts have suggested that exchanges inflate volumes to gain status and climb rankings on websites that will give them exposure, so they can then charge products hefty listing fees.
The Exchange Benchmark found that lower quality exchanges – those ranked C-F – have seen their market share increase over the past 12 months, further highlighting the fake volume problem in the cryptocurrency space.