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2:39 AM · Nov 12, 2019Twitter Web App

2) I think it's a good direction to go in; liquidity is currently much less gamed than volume

Replying to

3) However, the specific metric seems to have some obvious issues. It's hard for me to know exactly what they are because their documentation is super vague: support.coinmarketcap.com/hc/en-us/artic

4) Some examples of weird things: a) CMC reports similar liquidity for HitBTC BTC/USDC and Coinbase BTC/USD, but Coinbase has 2x the size on the orderbooks and a muuuch tighter spread.

4) Another weird thing: b) Stablecoin/stablecoin markets count too much. E.g. Binance's 4 highest "liquidity" markets are all stable/stable. c) Binance BTC/USDT seems much more liquid to me than HitBTC BTC/USDC but has nly 2/3 the "liquidity" score

5) It is much better than their volume metric: only about 30% of the top exchanges by liquidity are fake, vs literally 95% fake for volume. But that says more about their volume metric than their liquidity metric.

6) The liquidity metric still does no better than the "just rank exchanges by age" metric. The important _spot_ exchanges are almost all either Binance's age or older.

7) CMC _still_ doesn't have derivatives, so it's still missing most of the real volume.

8) I refuse to believe that the $35 wide HitBTC BTC/EURS market deserves higher weight than the Binance BTC/USDT market.

9) I suspect that this mysterious liquidity algorithm is putting too much weight on lower volume coins. It seems implausible to me that Binance/Huobi/OKEx should only be getting a few % of their total liquidity from their BTC/USDT markets worth 30% of their volume.

Cryptocurrency Derivatives Exchange

10) Shameless plug time! I think that ftx.com/trade/BTC/USD and ftx.com/trade/USDT/USD would probably be among the higher liquidity spot markets in the world.

@CoinMarketCap

, want to get around to listing FTX's spot markets?

@CoinGecko

has them!

ftx.com

FTX