Leading cryptoasset data provider CryptoCompare has announced an upgrade to its cryptocurrency Exchange benchmark tool.
The new Exchange Benchmark tool, according to a press release shared with CryptoGlobe, bases its rankings on several components, including the team behind the exchanges, the quality of their markets, their geographical location, legal status, and data provision.
The Exchange Benchmark update improves the cryptoasset data provider’s tool, launched in June 2019. Among the improvements are a greater number of cryptocurrency exchanges that are ranked - as it now ranks 160 active spot exchanges throughout the world, instead of 100.
The tool was initially launched in response to growing concerns over wash trading and incentivized trading schemes used by exchanges to inflate their volumes and gain ranks on popular listing platforms. The exchange ranks are set to bring greater transparency to the market, allowing users to make informed decisions.
In the document Charles Hayter, co-founder and CEO of CryptoCompare, said:
Our second Exchange Benchmark now includes a vastly expanded set of exchanges and even more granular analysis to enable market participants and new entrants to identify the best trading venues worldwide.
The updated Exchange Benchmark led to some interesting findings, including that top-tier exchanges – those graded AA-B – account for 33% of the global trading volume, while lower tier exchanges – rated C-E - account for 67%.
Around 41% of exchanges incentivize or reward trading, with 14% adopting the controversial trans-fee mining model. Moreover, 10% of exchanges representing 2% of the total trading volume “scored below A for their SSL rating, indicating a prominent security flaw in their browser security protocols.”
It also found only 4% of exchanges offer third-party insurance in the event of a hack, and only 8% use a custody provider to store users’ cryptoassets.
Taking into account all these factors, CryptoCompare found that the top 10 cryptocurrency exchanges are, in order: Gemini, ItBit, Coinbase, Kraken, Bitstamp, Liquid, OKEx, Poloniex, bitFlyer, and Bitfinex.
In the press release Gemini’s managing director of operations, Jeanine Hightower-Sellitto, was quoted as saying:
Security has been a key Gemini pillar since inception and protecting our customers’ cryptocurrency is a priority as we build the future of money. Our institutional and retail investors need a secure marketplace to buy, sell, and store their cryptocurrency, and we are pleased to be recognized for providing that to the industry.
Top Four Exchanges in the United States
This means the top four cryptocurrency exchanges in the space are based in the United States. CryptoCompare has also added new categories to its Exchange Benchmark, including a new security category covering security protocols and recent hacks, and one covering negative reports including flash crashes and unusual liquidation events.