The analytical platform CryptoCompare has recently published its Exchange Benchmark for Q3 2019. To create it, CryptoCompare assessed 164 crypto exchanges according to an innovative ranking methodology. It covers 64 qualitative metrics (such as due diligence) and quantitative metrics (such as market data based on order books and trades). CEX.IO made it into 16th place, entering the group of top-tier exchanges. Hence, we outpaced 148 other participants that received considerably lower scores.
The team behind CryptoCompare believes that crypto exchanges shouldn’t be evaluated by trading volume and liquidity only, as these metrics can easily be manipulated. Instead, they offer a transparent methodology that assesses exchange quality based on a broad due diligence check and a variety of quantitative metrics across markets. Thus, their overall ranking consists of the following components and weightings:
- Legal/regulation (20%) — Registration, KYC/AML procedures, sanctions compliance statement, etc.
- Data provision (20%) — Average API response time, historical candlestick data, WebSocket connection, etc.
- Security (20%) — SSL rating, cold wallet usage, 2FA, custody provision, etc.
- Team/exchange (15%) — Identities of top management, years of experience, etc.
- Investment (5%) — Funding by large VCs, smaller VCs, established non-crypto companies
- Trade monitoring (5%) — Market surveillance, conducted internally or via a formal external provider
- Market quality (15%)— Average spread, liquidity, stability, etc.
- Penalty factor: negative reports (-5%) — Flash crash, legal case or large breach of data privacy
All exchanges were assigned a grade to help market participants identify the highest quality, lowest risk, and most reliable trading platforms in the industry. Industry players including traders, investors, funds, exchange service providers, and regulators can benefit from the underlying data and ranking.
Read the full Exchange Benchmark report.