CoinGecko, the data markets aggregator, is stepping up its game once again. Four months after launching the original Trust Score metric, the Singapore-based company is set to unveil the upgraded 2.0 version of Trust Score, one that will filter out exchanges that purport “fake exchange volume.”
As per a press release shared with AMBCrypto on 11 September, the aggregator aims to address four key concerns that will look into exchange liquidity from a more holistic perspective, and thereby allow for a “more robust exchange ranking system.” The four “major measurements” include exchanges API technical coverage, scale of operations, estimated cryptocurrency reserves, and regulatory compliance.
In the previous version of the Trust Score which was released in May 2019, the two elements used to asses an exchange’s real trading volume was order book data and web traffic, while accounting for the baseline of the exchange’s ‘reported trade volume.’
The four metrics added to the latest version of the Trust Score, each have their own weightage. Liquidity will take 50 percent precedence, in terms of exchange ranking components, while the scale of operations and the API technical coverage take 30 percent and 20 percent, respectively.
In terms of scale of operations, CoinGecko will look at normalized volume of an exchange against that of “all other exchanges.” The API Technical coverage will be graded on the basis of 7 factors including, tickers data, historical trades data, order book data, and public documentation, among others.
Since the initial version of the Trust Score was released four months ago, Bobby Ong, CEO of CoinGecko, told AMBCrypto in an exclusive interview that one of the ma
“An exchange that reports a large amount of trading volume would be expected to have a correspondingly larger reserve. The reverse would be true for a smaller exchange. If an exchange does a lot of volume yet has low reserves, this could be perceived as a sign that something is not right.”
With the influx of institutional investors and their adherence to regulatory approval, CoinGecko will give importance to exchange compliance as well. In order to fortify this addition, the aggregator partnered with Coinfirm’s AMLT Network to “analyze regulatory compliance of exchanges.” Seven “risk categories” under this metric will be looked at, namely, License and Authorization, Sanctions, Senior Public Figures, Jurdisdiction Risks, KYC Procedures, Negative News, and Anti Money Laundering [AML].
However, the data aggregator has added that the last two metrics, reserves and regulatory compliance, are not “ready for inclusion in Trust Score 2.0 grading algorithm” yet and that they require “further refinement.”
On asked whether an exchange’s regulatory case prompted CoinGecko to include this metric, CEO Bobby Ong told AMBCrypto that no”specific” exchange led them to the same. Rather, it was part of their “continuous improvement plan” to improve exchange transparency, he said.
CoinGecko’s move to expand the boundaries of the Trust Score to provide a more holistic view of exchange dynamics does point to rapid developments in the space. Several reports this year have highlighted the need to tackle “fake exchange volume,” especially at a time when institutional investors are investing billions into crypto. The need to create a “robust exchange ranking system” is pertinent at this maturation stage of the industry.
With cases like QuadrigaCX, Cryptopia, and Bitfinex making the rounds on crypto-twitter and spilling over into the mainstream, the need to address regulatory missteps and reserve requirements will be an important addition for future tools to combat fake exchange volume.
PRESIDENT MADURO FORCES AIRLINES TO BUY FUEL USING PETRO CRYPTOCURRENCY
- Venezuela’s Petro: National cryptocurrency that failed
- Maduro’s plan to revive Petro
- Maduro is Determined to Make Petro a Success
Venezuela’s president, Nicolas Maduro, recently announced that he plans to revive the country’s oil-backed cryptocurrency Petro, which failed to attract users.
VENEZUELA’S PETRO: NATIONAL CRYPTOCURRENCY THAT FAILED
The last several years have brought great economic difficulties for the country of Venezuela, whose native currency, bolivar, suffered a great loss of value due to extreme inflation. At the same time, cryptocurrencies were finally leaving the shadows and becoming a big trend around the world. This is why the country decided to create its own, national cryptocurrency backed by its oil supplies — Petro.
The coin was supposed to represent a safe haven from the nearly-worthless bolivar, but also to help circumvent US sanctions. However, Petro, which was launched in 2018, failed to attract users as Venezuelans were more interested in Bitcoin and altcoins. Now, Maduro has announced that he plans to bring the Petro back.
MADURO’S PLAN TO REVIVE PETRO
This Tuesday, President Maduro published a decree, stating that airlines flying from Caracas are now obligated to pay for Venezuela’s fuel via Petro. He said,
I decree the sale of all fuel sold by the PDVSA for planes operating international routes be made in petros from now on.
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Further, he ordered that the coin must be more widely used throughout the country.
The fact that the US banned the use of Petro and marked it a scam also did not help the coin’s popularity.
Another one of Maduro’s decrees states that the coin must also be used for paying for state document services,
Still, Venezuelans have shown that they are open to the idea of cryptocurrency by using trusted, decentralized coins to battle hyperinflation.
MADURO IS DETERMINED TO MAKE PETRO A SUCCESS
In mid-May 2019, Bitcoinist reported that Venezuela attempted to discuss mutual trades in Petro with Russia. With both countries having issues with the US, they were discussing methods of eliminating the use of the USD in their trade deals.
Then, last December, Maduro also approved bonuses for public employees and pensioners, but he insisted that they will be paid in Petros. According to experts, it was not long before the coins were exchanged for bolivars, which were then used to purchase other currencies. This is why the country’s government recently blocked the possibility of exchanging Petros for bolivars.
So far, Maduro’s decree regarding fuel payment lacks details, and it remains unknown whether the measures he introduced only concern Venezuelan firms, or international carriers, as well. It is worth mentioning that international links to the country have been weak due to restrictions ever since the country’s economic crisis began seven years earlier.
With that said, the country capital’s Maiquetia Airport is still serviced by multiple companies, including Iberia, Panama’s Copa Airlines, Portugal’s TAP, Air France, and Air Europa. Even so, Venezuela does not offer direct flights to the US as a consequence of sanctions.
Akon Finalizes Agreement For His Cryptocurrency-Powered “Akon City”
When news first broke out about Akon’s plans to build a “real-life Wakanda city” powered by cryptocurrency and renewable energy, many thought it was just a ruse for the African-American singer and entrepreneur to stay relevant.
However, recent events have shown that the iconic rapper is indeed serious with his plans to build his own smart city named after himself “Akon City” in Senegal, and it is now official.
Akon Announces “Akon City”
Akon said on Monday via a tweet that he has finalized the agreement for the new city, a development which means there’s no going back.
The Senegalese artist first announced his intentions to build a smart city in June 2018 after launching a cryptocurrency called Akoin, which he believes will help “cryptonize daily human and business exchanges” in Senegal, his home country.
The city, which is estimated to cost about $2 billion,
The rapper’s plans for his city to run on renewable energy aligns with his “Akon Lighting Africa,” charity project, which according to him, has provided “scaled solar power solutions” across 18 African countries.
According to the singer, the project is expected to take ten years to complete, and construction, which is the first stage, started in March 2019. “Stage two is going to be 2025,” he said.
Crypto Could Change Africa
The Grammy-nominated rapper said during a Cannes Lions International Festival of Creativity panel that crypto and blockchain have the potential to change Africa in many ways.
“I think that blockchain and crypto could be the savior for Africa in many ways because it brings the power back to the people and brings the security back into the currency system,” he said.
CFTC Chairman Encourages Further Cryptocurrency Derivatives Regulations
In a recent interview with Cheddar, Heath Tarbert, Chairman of the CFTC, sat down to talk about Phase 1 of the upcoming U.S.-China trade deal, slated to be signed on Wednesday of this week.
According to Tarbert, the trade deal will “be an immense success,” and that once the agreement is signed, we’ll start to see U.S. markets, such as energy and agriculture, coming back to where they were initially before the trade war with China began a few years ago.
Tarbert also talks about his primary concern as the Chair of the CFTC: making sure that commodities, such as Bitcoin and Ether, are safe and accessible for everyone in all areas of industry.
Could this be the much-needed push to help bring legitimacy and widespread adoption to cryptocurrency derivatives?
While the future is still uncertain for many crypto derivatives, Tarbert believes that yes, regulation is the solution that we’ve all been waiting for.
On Cryptocurrency and Digital Assets
Today, there is an ever-expanding market for cryptocurrency derivatives.
But the issue is that these marketplaces are more-or-less unregulated exchanges. This, combined with the competition from their regulated counterparts, makes investors rather leery about investing in digital products.
According to Tarbert, one of the biggest complaints from market participants is that they need more clarity when it comes to cryptocurrencies. As it stands, Bitcoin and Ether are the only two cryptocurrencies currently sanctioned by the CFTC as commodities. All others are presently unregulated digital assets, which raises a major red flag for most investors.
On the other hand, Tarbert states that by regulating
In other words, in the future, market participants would be able to rely on the futures markets when purchasing cryptocurrencies and other digital assets.
The futures markets have been around for a long time. Therefore, investors would be able to rely on them for reassurance, as well as “price discovery, hedging, and risk management.”
Altogether, Tarbert’s opinion is that the CFTC is currently working to “legitimize and add liquidity to these (cryptocurrency) markets.”
A Brighter Future For Crypto?
Although many observers believe that regulation goes against the very principles of cryptocurrency itself, Tarbert thinks that the regulation of cryptocurrency derivatives will, “create a market for digital assets.”
Regulations might irk some market participants. But, regulation could also represent a golden opportunity for cryptocurrency derivatives to take the world by storm.
For example, when the U.S.- China trade war first started a few years ago, the U.S. government provided massive bailouts to the agriculture sector, which was heavily affected by the tensions between the two countries.
But at the time, if there had been more regulated cryptocurrencies available, farmers and ranchers might have had other options, rather than accepting the government bailout.
In the end, the regulation of cryptocurrency derivatives isn’t going to close doors, it’s going to open them. And make digital assets safer and more accessible for anyone who could benefit from investing.