Coin developers and founders know all too well the coirMarketCap’s siren appeal. Or more specifically, the crypto-rankings website’s Biggest Winners’ section, where it’s common to see tokens increase by more than 500% or even 1,000% in the 24 hour span. On a day when Bitcoin is floundering, it can be encouraging to see new tokens shooting their way to the moon on a green trail.
However, if you look closely, there is very little verified information about many such signs. This should not be a problem if the project is legal. On the other hand, carpet pulling is an ever-present danger.
Squid Game [SQUID] was one such example. The BSC token rose more than 2,400% in 24 hours, despite CoinMarketCap’s warnings that some users were allegedly unable to sell the token. After the near-total crash that shook thousands, CMC described SQUID as an alleged mat pull.
However, this is not the end of the saga. Every day brings a new set of top winners to CMC, with budding projects using everything from Twitter pleas to iPhone gifts to make sure they end up on the front page list.
Far from a “cap” on the tailor
Here are just a few dog-themed characters who have enjoyed their place in the sun within the past six months –
HUSKYX’s market data was not tracked at press time, while UFLOKI and NJF had unverified market capitalization. Also, HUSKYX’s Twitter has previously promised to give away an iPhone in exchange for users increasing the token’s market capitalization.
– Huskyxfinance (@HuskyX_Official) 15 November 2021
So, what is the basis for allowing projects to report their own market capitalization? A CoinMarketCap official agreed to answer AMBCrypto’s questions on condition of anonymity. They said,
“CoinMarketCap has the option for projects to report their own market capitalization, as well as a range of other statistics, through a self-reporting dashboard. These self-reported statistics are not taken into account in terms of project rankings, but are rather there to give the community as much information as possible about that project. ”
According to CMC’s website, a [New Listing] Add Crypto-asset request form requested potential projects to submit both marketing and technical information to be considered for a listing. However, filling out one such form showed that important project details – required by potential investors to make an informed decision – were left optional.
Time for CoinMarketCap to pick up its red pen?
The need of the hour is therefore to review whether CMC’s current rules are strict enough. While the company’s self-reporting policies can provide crypto-communities with more information, token projects have also taken advantage of this very feature to join the “Biggest Gainers” list.
An example is Prince Floki V2 [PrinceFloki], which admitted to using the rebase technique to change token prices. The white paper of the sign said,
“… we can be on the top-profit sections of websites due to the illusion of a rise in price floor, so is a brilliant marketing tool in itself.”
[Note: PrinceFloki and Prince Floki V2 are listed as different projects on CMC, but share the same ticker, website, and white paper. Meanwhile, the PrinceFloki whitepaper refers to the token as Prince Floki Inu. However, by press time, CoinMarketCap had flagged the PrinceFloki project for a “serious rebase error vulnerability.”]
When the dog smells fishy
Moving away from CoinMarketCap’s website and to its official Twitter account raises a new set of doubts. Why so? Aside from sharing news, updates and memes, CMC’s Twitter also reinforces the hype surrounding coins and tokens.
Congratulations for @dogsofelon team! 🔥
Check out the collection here 👇https: //t.co/9FiG9X3s0d
– CoinMarketCap (@CoinMarketCap) 8 November 2021
Crypto researcher and reviewer Max Maher praised CMC specifically for the way it promoted the Dogs of Elon [DOE] sign up on Twitter. Although the market capitalization was verified and the project was marked as audited, Maher claimed that a reverse image search on the founders’ [now deleted] photos took him to a generic image site. On CMC, he further said,
“This exchange was one of the first to mention how the $ DOE token jumped 600% in just 48 hours after it appeared live.”
When AMBCrypto asked the aforementioned official about the company’s reasons for promoting DOE on Twitter, they replied:
“I think our team does not really want to respond at the moment.”
Time for a shorter leash?
CoinMarketCap often finds itself trapped between the devil and the deep sea, as it provides the information investors need, while also maintaining the ethos of a largely decentralized crypto-ecosystem.
But the question is: What will eventually make the crypto-analytics giant change its listing requirements? Will the next large-scale mat pull the trigger, or is there a chance of preventative action?
Well, according to the CMC official,
“CoinMarketCap is constantly updating its listing requirements and ranking criteria – the crypto market is not static, and neither are we.”
What’s the big takeaway here? Well, crypto traders need to think long and hard about how much credit to give CoinMarketCap’s top winners and promoted tokens, before making life-changing investment decisions.