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When choosing crypto exchanges, investors usually evaluate the exchange from multiple perspectives. The evaluation dimensions of investors can usually be divided into three categories, including the basic qualifications of the exchange, liquidity, and risk.
- Basic Qualifications
- The basic qualifications of the exchange, including the team, duration, and compliance, are the prerequisites for determining whether the exchange is "trustworthy".
- Liquidity is an indicator to evaluate the adequacy of the exchange's scale, capacity, and counter-party.
- risk is an indicator to evaluate the safety of transactions. We comprehensively evaluate the overall strength of an exchange from the three aspects of the exchange mentioned above (basic qualifications, liquidity, and risks) and then assign corresponding ratings based on the final score. For the details of our exchange rating, feel free to download the full document below that outlines our methodology.
In the fields of commerce, economy, and investment, liquidity refers to an indicator that an individual can quickly buy or sell the underlying assets without suffering a substantial price loss. Mature markets should maintain better liquidity for a long time. Similar to stocks trading, in the secondary market of digital assets, liquidity is very important for investors. In addition, the same crypto is often listed and traded on many exchanges at the same time. Therefore, choosing an exchange with good liquidity is the homework that investors (especially those with large amounts of funds) must do. The purpose of the launch of the TokenInsight exchange liquidity data platform is to help investors observe the liquidity of the exchange more accurately and conveniently.
TokenInsight exchange liquidity score is calculated by calculating the depth and slippage data of designated trading pairs on the exchange, and combining the number of trading pairs (contract trading only), trading volume (contract trading only), and open interest (contract trading only), and other data are comprehensively obtained. All data is obtained through the open market API of the exchange. Anyone can repeat the calculation process of verifying the liquidity score according to the method used by TokenInsight through the public API interface.