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CoinMarketCap Features Binance. A Smell Of Centralization?

CryptocurrencyMar 26, 2021 06:01AM ET
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CoinMarketCap Features Binance. A Smell Of Centralization?

  • CoinMarketCap added a buy crypto option, sponsored by Binance and linking to the exchange.
  • The feature is attached to Bitcoin, Ethereum, and Binance Coin.
  • Binance acquired the CMC platform last year, raising the questions of the possible conflict of interests.

One of the leading cryptocurrency data providers, CoinMarketCap (CMC), added a new feature on its crypto rankings list today.

Users who check up on the cryptocurrency price movements on CMC can find a new “Buy” option next to three of the top 5 cryptocurrencies. The platform added the buy feature for the two largest digital currencies, Bitcoin and Ethereum. Binance Coin (BNB) is the third on the list.

The feature is sponsored by Binance exchange. It offers to buy digital assets with zero fees on Binance’s platform and links directly to its account registration page.

The deal with Binance

Binance purchased the crypto data provider CoinMarketCap in March 2020. The acquisition valued at around $400 million was named a “deal of the century” for being one of the biggest investments in the crypto space.

Official statements claimed that CoinMarketCap would continue to run as an independent entity. However, the acquisition of a popular crypto data provider and ranking platform immediately raised questions of the possible conflict of interests.

CMC changed the ranking methodology

Suspicions significantly intensified a month after a deal with Binance was made, when CoinMarketCap (CMC) made critical changes to the cryptocurrency exchange rankings algorithm.

The platform introduced a new metric called Web Traffic Factor and set it as default over the previously used liquidity score metric.

Since the ranking method update, Binance instantly jumped on top of the cryptocurrency exchange list. Meanwhile, following the liquidity score rankings, Binance ranked 4th after Bibox, Huobi, and Bitfinex crypto exchanges.

On the flipside

  • Suspicions of trading volume manipulations shadowed CoinMarketCap back in 2019, as three-quarters of the top 25 exchanges listed on the platform were suspected of reporting fake trading volumes.
  • Although CMC claims that it operates as an independent entity, the clear Binance sponsorship raises questions of the platform’s neutrality.

CoinMarketCap is one of the most popular cryptocurrency data providers with nearly 130 million visits within the past five months, according to SimilarWeb. The website is also ranked 16 among the world’s most visited sites in the investing category.

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CoinMarketCap Features Binance. A Smell Of Centralization?
 

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