What is Coiniran Cryptocurrency Exchange Benchmark?
Coiniran Cryptocurrency Exchange benchmark is a ranking methodology that the Coiniran research center has developed to analyze the quality of Iran-based Cryptocurrency Exchanges.
This research was revealed for the first time in November 2020, and the new version of it, the Spring Edition, also has been published. The purpose of this ranking is to increase transparency and improve the performance of Iranian Cryptocurrency Exchanges.
This ranking gives all Exchanges which are operating in Iran a quantitative score and a qualitative mark. In this article, we want to describe the Coiniran ranking methodology and discuss what was important for us in our mission to evaluate the quality of Iran-based Cryptocurrency Exchanges.
Market volume is misleading!
Many believe that exchanges with higher market volumes have better quality and thus are safer to use. But we know that exchanges can easily manipulate the liquidity and increase the volume on their platforms by using incentive mechanisms such as trading competitions and airdrops. This is to say that evaluating exchanges based solely on their market size could be misleading. We believe that the evaluation of exchanges should be based not only on their market volume but also on the quality of services and the transparency of information in it. In other words, to better analyze the quality of a Cryptocurrency exchange, a set of different metrics must be considered.
What should be important then?
In our methodology, we tried to evaluate exchanges from different points of view. In fact, The Coiniran benchmark consists of six independent metrics with subsequent weightings:
To ensure not one metric overinfluences the overall ranking, Each metric is converted into a series of points based on clearly defined criteria. To say, each metric consists of multiple sub-metrics.
In the following paragraphs, I will review the main metrics of the Coiniran benchmark one by one.
Legal Compatibility
We developed nine different sub-metrics to examine exchanges in terms of their legal compatibility. The graph below shows our legal metrics and their subsequent weightings.
Security
Security breaches on cryptocurrency exchanges are alarmingly common. Exchanges are key targets for hacking attacks. To evaluate the level of security exchanges provide for their users, a series of different metrics were developed. The graph below demonstrates our high-level security metrics and their subsequent weightings.
Data provision (API)
An Application Programming Interface (API) is a computing interface that defines interactions between multiple software intermediaries. An API allows you to connect with your exchange and have access to real-time market data in the crypto space. It is an important issue for institutional and algorithmic traders. We developed nine sub-metrics to analyze the quality of the API of Exchanges.
Market quality
In order to provide a representative picture of what trading looks like in Exchanges, we adopted five different metrics concerning the quality of their Markets. Our aim was to identify Exchanges that behave differently from what we expect as a normal Market in the Cryptocurrency atmosphere.
User experience
The User experience is a user emotion and attitudes about working with the exchange platforms. It generally includes a user’s perceptions of systems aspects such as utility, ease of use, and efficiency. We designed seven metrics to have a good sense of how working with these platforms looks like, which was gathered through a structured survey from the volunteered users.
Executive management
The quality of the Executive Management team and their level of transparency can bring us to understand how well an exchange is managing. We developed five metrics to analyze all exchanges based on the assumption that the more transparent and experienced/educated an exchange executive team is, the higher the quality of the exchange.
There are two metrics with the titles (Support and Monitoring) and (Negative reports), which are not among the main metrics in our ranking system. The first is considered an incentive point, and the second is a punitive point.
The “Support and Monitoring” metric evaluates the quality level of investment companies in exchanges. It also examines the quality of tools that exchanges use to monitor user tradings and transactions. This metric adds up to five points to desirable exchanges.
The metric of “Negative Reports,” as its name suggests, is based on the reports received by the research team as well as users’ complaints against Iran-based Cryptocurrency Exchanges. This metric gives up to 5 negative points to exchanges that deserve it.
Grading
The final score of each exchange is obtained from the cumulative score of all the mentioned metrics. The table below identifies the quality mark criteria corresponding to each score range.
The Coiniran Exchange benchmark is a seasonal ranking methodology. We have published two editions of our ranking yet. It should be noted that this ranking does not indicate the permanent and inherent superiority of one exchange over other exchanges. It also does not introduce a suitable place for investment and trading activities. The Coiniran research center has developed this ranking system to inform users about the quality of Iran-based exchanges.
We believe that this competitive ranking system can increase transparency and, as a result, the quality of service providers in Iran.
You can read our latest report and ranking here at Coiniran.
