DAPS Coin was the worst affected by the change. Adel de Meyer, the CEO of DAPS Coin woke up this weekend to discover that DAPS Coin shifted out of position 176 to position 1,173 in a single day. No explanation has been provided by CoinMarketCap as to why DAPS Coin had dropped almost 1,000 in rankings.
Adel de Meyer, CEO of DAPS Coin
In shock, de Meyer posted a video sharing her thoughts on Twitter which has already received close to 10,000 views. I reached out to de Meyer to find out more information and here’s what she had to say.
Question: What happened to DAPS Coin?
Adel de Meyer: Not too long ago, CoinMarketCap made some changes to their algorithm. Suddenly, without any warning, DAPS dropped over 1,000 in its rankings. Nothing has changed for DAPS to have fallen that low.
Other projects have less market cap, project activity and volume than DAPS, but yet their rankings weren’t impacted. Because of this, I could not understand why CMC decreased our position by this much. This is why I conducted an investigation and shared my findings on Twitter—the response was very supportive.
Question: What do you think about the requirements for the top 200 coins on CoinMarketCap?
Adel de Meyer: In my opinion, the requirements are vague and open to interpretation. There is no definitive method by which one can state that if the requirements are fulfilled, you will be ranked appropriately. Their direct competitor CoinGecko has its methodology published publicly, so it gives projects a fair and equal chance to rank better for their project’s visibility and credibility.
CMC states that one of the ranking factors is “significant liquidity/trading activity with normal bid-ask spreads across sufficient sources of market data.” This motivates wash trading to comply with this requirement. So if one exchange listing falls low on liquidity, it is up to the project to employ market makers to ensure “normal” bid-ask spreads across the board.
This does more harm than good to innovation, startups and the overall growth of the cryptocurrency industry. For the top 200 rankings, they also use something called Indices. “The CoinMarketCap Indices are a suite of benchmark indices designed to be the most comprehensive in the market, measuring the performance of the top 200 cryptocurrencies by market capitalization traded in USD.”
The methodology principles state that “all eligible cryptocurrencies are ranked by their current market capitalization.” To me, this is confusing because the market cap is not what CMC ranks you with any more.
Question: Can you explain what safekeeping is?
Adel de Meyer: Safekeeping is synonymous for deposit or surety. Some of the bigger exchanges require a set amount of money (some up to 1 million dollars) that you guarantee for a year to use and trade in case your volume drops. Exchanges will do this to maintain volume and not damage their reputation. That’s because exchanges want to show “volume and activity” for each coin.
This is mainly, due to the exchanges wanting high rankings on CMC to attract users and new listings. Crypto exchanges can demand huge listing fees when they are perceived as the biggest with the “most volume.” Rumors have been going around, speculating that some crypto exchanges are paying for higher rankings. If this is indeed happening, then this practice is completely unethical.
Question: How does the CoinMarketCap decision impact the blockchain community?
Adel de Meyer: This is a fundamental issue for multiple reasons:
Question: Are there any new interesting developments at DAPS?
Adel de Meyer: Our code is currently undergoing a security audit by Red4Sec who is well-known for work with other large projects like NEO. We also just returned from Canada’s largest blockchain event called Futurist, showcasing how DAPS Coin is competing in the privacy coin space. Lastly, we’re planning for the launch of our mainnet, which we are pretty excited about—that will launch at the end of September 2019.