It has been reported that the ranking is an attempt to rank exchanges without including any wash trading, which came about after the landmark Bitwise report that suggested 95% of the volume was fake.
However, the report identified ten exchanges with legitimate volume:
As per the report, the methodology change of this week has propelled Huobi, OKEx, Liquid, Bithumb, and UpBit into the top 10 by volume, where Binance continues to sit on top, which may lend additional credibility to CoinMarketCap’s recent controversial decision to rank exchanges by web traffic, also placed Binance at No.1.
Messari overhauls “real volume” methodology and adds 10 exchanges including Huobi, OKEx and Upbit https://t.co/62VQeeELRn — Cointelegraph (@Cointelegraph) May 22, 2020
Ryan Selkis, the CEO of Messari, said that the revamp was due to the fact that the real volume metric omitted some big players “with *some* overstated volume, but *enormous* legitimate trading volume at the same time. Giants like Bithumb, UpBit, and CoinOne in Korea, Liquid in Japan, and most importantly, Huobi, OKEx/OKCoin, and Gate.io in China.”
The statistic of a new approach stated:
“Exchange rankings, ratings, and liquidity estimates from CoinGecko, CoinMarketCap, CryptoCompare, CryptoWatch (Kraken), Nomics, and FTX’s volume monitor, plus onchain transaction data from Chainalysis and other on-chain data providers, and anecdotal data from top traders.”
Likewise, the added Korean and Chinese exchanges received “a 50% haircut … to better approximate their true volumes.” This is believed to be better than web traffic analysis of these exchanges which resulted in ‘real volumes’ being reduced by 90% from reported trading volumes.
However, it’s clearly still a bit of an approximation.
Selkis said that the change may be “less precise than alternatives”, though “it is more accurate” and the methodology will be regularly reviewed.
Thus, he concluded:
“Importantly, we will review our methodology quarterly in order to add or remove constituent exchanges, and tweak volume adjustment parameters.”