CMC plays a very important role in this.
In the last 12 or so months it has become increasingly more difficult to nest yourself in this industry as exchange, but there is a pretty convenient way to work around that 'problem', which is to generate tons of (fake) volume and have your exchange climb the CMC ladder to attract tons of noobs. In other words, faking volumes is a different type of marketing for exchanges.
CMC is ranked as the 341th website globally, which is an achievement on its own, and that's why exchanges are desperately looking to rank up on that site in terms of volumes.
OKEx, currently ranked nr 2 based on volumes has been a champion in faking volumes, and it shouldn't come as a surprise that their main traffic supplier is CMC. The same applies to Huobi, and yet again, their main traffic supplier is CMC. Another Asian volume faker with an obvious CMC connection is ZB.com, and this is currently the 5th largest exchange based on volume.
If people still think CMC is a meaningless site, they are wrong.
Topic: [2018-09-27] Fake Trading Volume A Persistent Problem in Crypto (Read 188 times)
September 27, 2018, 11:53:48 PM
Are new crypto exchanges that you’ve never heard about before repeatedly showing up on CoinMarketCap’s exchange ranking? Don’t be surprised anymore.
The phenomenon is now making headlines again, with Bloomberg recently questioning how it’s possible that a new exchange launched just three months ago already reports a trading volume that exceeds that of the 217-year-old London Stock Exchange.
The new exchange in question this time is Singapore-based crypto-to-crypto exchange BitForex, a new exchange that utilizes a controversial practice known as “transaction mining” to report daily trading volumes in excess of USD 5 billion (USD 3.4 billion at the time of writing.) In comparison, at the time of writing, trading volume at Binance, a major exchange, stands at USD 1.33 billion.
Transaction mining essentially involves returning a portion of the trading fees paid by users when they place orders on the exchange in the form of the exchange’s own token. In extreme cases, such as with BitForex, users can receive tokens worth more than the trading fee they paid, essentially earning free money by generating buy and sell orders on the exchange. Users then follow up and often run trading algorithms designed to generate a large number of orders, inflating the trading volume on the exchange.
Transaction mining is a controversial practice because it only works out in the user’s favor as long as the exchange’s token retains its value. And in order to retain its value, it needs to continuously attract new users to make up for other users who are cashing out. Nonetheless, the practice has been, and is being, used by many of the exchanges.
...
https://cryptonews.com/news/fake-trading-volume-a-persistent-problem-in-crypto-2675.htm
The phenomenon is now making headlines again, with Bloomberg recently questioning how it’s possible that a new exchange launched just three months ago already reports a trading volume that exceeds that of the 217-year-old London Stock Exchange.
The new exchange in question this time is Singapore-based crypto-to-crypto exchange BitForex, a new exchange that utilizes a controversial practice known as “transaction mining” to report daily trading volumes in excess of USD 5 billion (USD 3.4 billion at the time of writing.) In comparison, at the time of writing, trading volume at Binance, a major exchange, stands at USD 1.33 billion.
Transaction mining essentially involves returning a portion of the trading fees paid by users when they place orders on the exchange in the form of the exchange’s own token. In extreme cases, such as with BitForex, users can receive tokens worth more than the trading fee they paid, essentially earning free money by generating buy and sell orders on the exchange. Users then follow up and often run trading algorithms designed to generate a large number of orders, inflating the trading volume on the exchange.
Transaction mining is a controversial practice because it only works out in the user’s favor as long as the exchange’s token retains its value. And in order to retain its value, it needs to continuously attract new users to make up for other users who are cashing out. Nonetheless, the practice has been, and is being, used by many of the exchanges.
...
https://cryptonews.com/news/fake-trading-volume-a-persistent-problem-in-crypto-2675.htm
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