thecoinrepublic.com
- In the first half of 2021, data aggregators listed almost 2,000 new crypto assets
- CoinMarketCap published its 2,000th asset on its website in 2018, at the height of the initial coin offering (ICO) boom
- According to CoinGecko data, about 16,000 crypto-assets were produced between 2014 and 2021
According to data given with CoinDesk, data aggregator CoinMarketCap added 2,655 new crypto assets to its database in the first half of 2021, bringing the total number of listed currencies to 10,810. CoinMarketCap published its 2,000th asset on its website in 2018, at the height of the initial coin offering (ICO) boom.
According to Aaron Khoo, head of listings at CoinMarketCap, “this year saw a Cambrian explosion of new crypto assets, mostly as a result of many tailwinds.” He’s referring to the evolutionary event 541 million years ago when enormous numbers of new animals appeared to burst into existence.
Two other data aggregators, like CoinMarketCap, added 2,000 or more new assets to their databases in 2021. CoinGecko, based in Singapore, added 3,064 new assets to its website, while Coinpaprika, a smaller crypto data and research portal based in Poland, added 2,000 new assets. Coinpaprika’s business development manager, Wojciech Maciejewski, stated that the site is currently flooded with fresh applications for currency listings.
Bullish price action, the influx of traditional financial institutions, influencers, and celebrities to the space, as well as the non-fungible token (NFT) boom and the rise of meme coins like Dogecoin, Shiba, and safemoon, are all contributing to the 2021 surge in new crypto assets, according to representatives from CoinMarketCap, CoinGecko, and CoinPaprika.
This isn’t the first time the crypto industry has seen a massive influx of new assets. Following the initial coin offering (ICO) frenzy in 2017, additional crypto assets flooded the market in a similar fashion. More than three-quarters of those ICOs, however, turned out to be scams, and nearly half of them failed to generate funding. Only a fraction of the thousands of new crypto assets that came onto the market in 2021 will survive, according to history.
They don’t have any evidence to back this up, but Sze Jin Teh, principal product manager at CoinGecko, stated in an email that the expectation is that [the new assets] are more or less comparable to the 2017 ICO round, where only a handful of assets managed to stick around after the initial craze.
Behind the figures
According to CoinGecko data, about 16,000 crypto-assets were produced between 2014 and 2021. However, this figure includes all currencies, both active and inactive assets (assets attached to disrupted projects). Active assets on Coinpaprika, for example, account for over half of the 6,342 assets listed on the site, according to Maciejewski.
According to the given data, CoinGecko hit a monthly high for the number of new coins published on its site in 2017. In December 2017, the platform listed 914 assets. According to Kristian Kho, operations lead at CoinGecko, the ICO mania peaked in December 2017, when retail interest in crypto soared, coinciding with bitcoin’s all-time high price. This was the first time we saw a stampede of new tokens developed to cash in on the popularity of the early trailblazers (Filecoin, Tezos, EOS, and the like). We even built a special ICO page back then to keep track of all the ongoing ICOs, according to Kho. However, the majority of those tokens were only temporary.
The screening procedure
In order to keep up with the growing quantity of crypto assets and listing applications, each listing platform has its own set of criteria for approving new assets. CoinMarketCap examines a long variety of parameters on its website, but there is also a competitive benchmarking element, according to Khoo, which involves comparing the asset to other, similar applicants.
CoinGecko evaluates listings holistically, using a set of internal criteria to assess each coin. To prevent manipulation by the project team, the actual listing criteria are not released, according to Kho in a written statement.
However, both platforms, as well as Coinpaprika, pay particular attention to the coin’s active trading volume and liquidity, as well as other aspects such as social media presence, community sentiment, and the team behind the project.
The rise of decentralized exchanges (DEXs), where listings are permissionless and costs are low, has made it even easier to generate and market coins, according to CoinGecko’s Kho. According to Kho, this means that anyone may tokenize anything, fueling the bizarre new world of meme currency. As a result, CoinGecko has become much tighter when it comes to listing new tokens. Because of the proliferation of DEXs, the number of scam currencies has increased, Kho explained.
Coinpaprika now approves 95% of requests for assets already listed on centralized exchanges like Binance or Coinbase, with only incomplete applications being rejected. However, because of their decentralized nature, DEXs often do not have stable or dependable API endpoints (communication channels) and so their adoption rate lowers to around 60% to 70%.