CryptoCompare, the leading institutional digital asset data provider and FCA-authorized benchmark administrator, has launched its updated Exchange Benchmark, which now also assesses the risk associated with decentralized exchanges (DEXs).
According to a press release the firm shared, trading activity on decentralized cryptocurrency exchanges has skyrocketed, to the point that in certain instances DEX volumes surpass those of centralized cryptocurrency trading platforms. As a result, the firm’s Exchange Benchmark now assesses “centralized and decentralized exchanges from a risk perspective.”
Per the firm, the Exchange Benchmark ranks 130 centralized trading platforms and 30 decentralized platforms from AA to F, in a bid to “identify the lowest-risk trading venues for market participants.”
CryptoCompare highlights that the DEX Benchmark functions independently from the Exchange Benchmark and “features a unique methodology that covers 60+ metrics under the following areas: Security, Community, Transparency, Governance, Market Quality and Incentives.”
CryptoCompare’s co-founder CEO Charles Hayter was quoted saying:
CryptoCompare’s Exchange Benchmark has become an essential tool for institutional investors navigating the digital asset landscape. Given the increased adoption of decentralised exchanges, the latest benchmark has been expanded to encompass an industry-first framework for assessing the risk of this new type of trading venue.
The decentralized Exchange with the highest score in the firm’s first-every DEX Benchmark was Uniswap v3, which managed to get an A rating. Behind Uniswap came Curve, a stablecoin exchange, and Balancer, which allows users to automatically managed portfolios. These platforms were followed by dYdX and SushiSwap.
When it comes to centralized cryptocurrency exchanges, the highest rating was given to Bitstamp, the world’s longest-running cryptocurrency exchange.
Bitstamp’s AA rating was followed by Nasdaq-listed cryptocurrency exchange Coinbase, which received an A rating, and by Gemini, which also received an A rating with the same score as Coinbase. These were followed by LMAX Digital and leading cryptocurrency exchange Binance which lost some points over “negative events.”
Next were Kraken, FTX, and Luno by that order. These exchanges outranked other leading platforms such as itBit, Binance.US, Bitfinex, Crypto.com, and FTX.US.
CryptoCompare’s report also points out that in the April 2022 edition of the Exchange Benchmark the firm highlighted that 54 cryptocurrency exchanges had shut down since June 2019. It adds that 68 exchanges have shut down in the past three years as the industry consolidates.
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