CoinMarketCap Changes Ranking Algorithm Again, Binance Holds Top Spot

CoinMarketCap, one of the top trackers and insight platforms in the crypto industry, has made another change to its ranking algorithm as it continues to try various iterations. The platform announced in a blog post from earlier today that it had implemented an algorithm that will integrate web traffic into its rankings.

Web Traffic Remains CoinMarketCap’s Central Ranking Factor

In its blog post, CoinMarketCap explained that it had developed the Web Traffic Factor, a metric that analyzes users’ activities on trading platforms, into its rankings. The factor considers aspects such as unique visitors, the number of page views, and the amount of time each user spends on an exchange. It also considers search engine rankings and bounce rates.

The algorithm makes CoinMarketCap’s ranking technique more complicated, as it now involves both market rankings and the platform’s “confidence score.” Both of those metrics were introduced late last month, and they’ve now formed an integral part of CoinMarketCap’s exchange rankings.

As the company explains, the market pairing ranking considers the Liquidity Score, Web Traffic Factor, and the volume of each pairing. From there, the platform assigns an exchange a “confidence indicator,” which shows CoinMarketCap’s trust in the exchange’s figures.

The market aggregator adds that this change concludes the first phase of its exchange ranking algorithm update. It also confirms that things will continue to be this way for the next few months.

Binance Still on Top

Under the new ranking, Binance, CoinMarketCap’s parent company, retains its top spot, with a Web Traffic Factor Score of 1,000. The latest update confirms that the top-ranked exchange will always have a 1,000 Web Traffic Factor Score, while others’ scores will be calculated relative to it.

At press time, Huobi Global, Coinbase Pro, Kraken, and Bitfinex round out the top five. They hold Web Traffic Factor Scores of 752, 972, 856, and 781, respectively. While there are no reactions to CoinMarketCap’s change yet, it’s also quite interesting that Binance places in top spot again. CoinMarketCap began its focus to prioritize web traffic last month, according to a blog post at the time.

At the time, CoinMarketCap explained that it had found the crypto market to be a retail-driven one. Thus, exchanges with high volumes show that they have a higher concentration of retail customers. The market aggregator also pointed out that measuring exchanges by web traffic is more convenient than asking them to submit trading volumes.

Many quickly pointed out that this appeared to be a conflict of interest. Binance purchased CoinMarketCap months ago, and the platform soon tweaked its focus to web traffic.

Carylyne Chan, the firm’s Chief Strategy Officer and current acting CEO, also said in an episode of the Blockchain Journeys podcast last year that he didn’t believe web traffic was a reliable way to rank exchanges. So, many naturally believed that Binance had pressured CoinMarketCap to change its ranking algorithm to favor them.

Changpeng Zhao, Binance’s chief executive, eventually responded to the criticisms. In a Twitter thread, he confirmed that the company would continue to change the raking algorithm until it arrives at one that captures the state of the market.