Providing accurate cryptocurrency metrics and data is crucial to any data aggregator. CoinGecko keeps pushing the envelope on this front. Their new Trust Score algorithm update can put crypto exchanges in a very different spotlight.
Building the Right Data Sets for Exchanges
Collecting information on cryptocurrency trading platforms is a very complex process. Most users and enthusiasts only look at the trading volume, trading pairs, and fees. Behind the scenes, there are dozens, if not hundreds of other factors that need to be taken into account as well.
Gaining access to all of this information is difficult. Different platforms provide unique insights into crypto assets, but one aspect is often overlooked. No one has really paid much attention to the cybersecurity aspect of a cryptocurrency exchange. That is very strange, considering how criminals and hackers have been drawn to this industry for as long as people can remember.
Independent crypto data aggregator CoinGecko is the first major service provider to pay attention to this crucial aspect. The cybersecurity ratings provided by Hacken is now incorporated into the platform’s Trust Score.
Evolving the Trust Score
Since May of 2019, CoinGecko has attributed a Trust Score to all tracked cryptocurrency exchanges. In the initial version, or primarily focused on ranking trading pairs based on their web traffic, liquidity, and activity-related metrics. While it provided valuable insights, the team quickly acknowledged that this information can still be manipulated by external parties.
To ensure that the information is manipulation-resistant, the Trust Score was “upgraded ” in September 2019. The trading activity metrics were canned and replaced by scale and API coverage of trading pairs. A solid step in the right direction. However, it is still not a foolproof method.
Improving upon this metric is an ongoing priority for the CoinGecko team. Their commitment to incorporating cybersecurity rankings highlights their desire to provide transparent data to platform users.
Opting for cybersecurity as a metric is a remarkable choice, but it is also the only option that can benefit everyone in the cryptocurrency space. More importantly, it is a metric that anyone and everyone can understand, regardless of their technical know-how.
The Reason for Choosing Hacken
Truth be told, Hacken will seem like a surprising choice for a lot of cryptocurrency enthusiasts. Cybersecurity firms aren’t often mentioned by name in the crypto industry, for some unknown reason. As such, most people may not even know the company exists, what they do, or why they are of interest to the CoinGecko team.
The Estonian firm has been tracking crypto exchange cybersecurity practices for a while now. Given the vast number of exchange hacks, data breaches, and other security incidents, it is evident that something needs to change. Thanks to Hacken, companies can now be advised on what they need to improve to prevent any wrongdoings in the future.
Behind the scenes, Hacken looks at the different pillars of cryptocurrency exchanges. Their infrastructure, user account protection, and previous hack cases all help determine the cybersecurity rankings. If companies have a bug bounty program available, it can help improve their rating slightly. Unfortunately, very few crypto trading platforms see merit in bug bounties in this modern day and age.
For the time being, Hacken’s ratings contribute to 2 out of 10 points of the Trust Score. Failing to score any points will show users that said platform is best avoided for the time being. Having ample liquidity is no longer sufficient to automatically receive high marks. It is a more than welcome change for this industry.