Falling Exchanges | Failing Exchanges

The 2022 calendar year has cleansed the crypto market in one way. All the ill-doings of the bullish years have come to haunt the evil-doers in the bear market. Did my last sentence sound cryptic (pun intended)?

The crypto world was waking up to one disaster after another, starting with Celsius, Luna/Terra, FTX, and more. And it may not end soon. Gemini and others are waiting in the queue. The worst affected by these downfalls are the investors, traders, institutions, and even countries. Of course, for countries, it means tighter regulations, while for traders, it meant immediate loss of funds. Either way, it was not a great scenario.

For the crypto-followers knowing the who's who of the exchange world is easy, but that can't be said about the newbies and first-time investors. Hence some directions would undoubtedly help, especially on which exchange to start the crypto journey.

And That Brings Us to Coingecko and CoinMarketCap | Exchange Rankings Added

I have used both these sites at different points to check out details of a coin/token or new project launches. But now, even exchange details will be made available on these sites. With so many investors getting scammed out recently, exchange details would act as a boon.

Now, people are a bit skeptical about CoinMarketCap because of its Binance ownership, but you will have to admit that both websites aren't too different regarding the ranking. Of course, the ratings themselves are different, but the positions are more or less the same.

CoinMarketCap

Here is a look at the CoinMarketCap ratings. We start with the DEX Ranking:

Source: CoinMarketCap. Not a complete list.

The next tab is the Spot Exchange Ranking:

Source: CoinMarketCap. Not a complete list.

The listing also includes ranking for Derivatives and Lending Exchanges. The same can be seen in the above images for those interested. And if you want to navigate to the site itself, here is the link: https://coinmarketcap.com/rankings/exchanges/.

Coingecko

Now, let's look at the Coingecko ranking:

Source: Coingecko website. Not a complete list.

Interestingly, the site says that Coinbase hasn't shared the Proof-of-Reserves. However, just this morning, 25th November 2022, Coinbase came out and shared that they hold 2,000,000 BTC worth 33,000,000,000. I think that will be updated soon.

Also, the DEX ranking:

Source: Coingecko website. Not a complete list.

If you wish to visit the website and check out the rankings, you can do so here: https://www.coingecko.com/en/exchanges.

That’s Cool | What More?

While this is one of the most significant sources of information for new traders, most would agree that it would be difficult to gauge the exchange's well-being without tracking relevant parameters.

To alleviate that fear, both sites consider tracking parameters like traffic, liquidity, trading volumes, and confidence (of the traders, I presume). Of course, proof of reserve is also one of the most critical parameters. This should help.

However, since the FTX debacle, one thing is clear – the proof-of-reserves are not enough to show the well-being of these exchanges. We also need proof-of-liabilities. I mean, I have 10 BTC with me (proof-of-reserve), but I owe others 20 BTC (proof-of-liabilities) means that I am in trouble. Unless I have established sources to cover the 10 BTC I am liable to pay, I may not stay afloat. In such a scenario, newcomers are only in trouble going to such exchanges.

That's the improvement I wish.

What's The Verdict?

It is a good start. Imagine exchanges, which were the black boxes for so long, coming out and sharing their reserve details. That's a huge step forward, even without legal regulations. Now, only if we could add the other essential parameters would we have a wholesome picture.

However, nothing stops you and me from using these websites to identify better exchanges. After all, something is better than nothing! 😊

Image Courtesy: CoinMarketCap and Coingecko Website Images || Ijmaki on Pixabay.

Article Source: Own. Part of it was first published on Reddit.

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