The reported volumes of cryptocurrency exchanges came under fire earlier this year after trading analytics platform, The Tie, released its own findings and concluded that 90% of the trading volumes were incorrectly reported by crypto-exchanges. The cryptocurrency industry, much like traditional ones, is plagued with discrepancies in financial data and soon after the report came out, crypto-exchanges came under extensive scrutiny.

Alameda’s attempt to test the legitimacy of the trading volume data consisted of parameters such as manual inspecting of trading data, comparison between order book depth and volume, metrics which showed clear signs of wash trading with the primary goal to rank on CoinMarketCap’s platform, following which exchanges can charge hefty listing fees from altcoins and cryptocurrency projects.

There will always be certain entities in the space that will take advantage of the blind spots and manipulate trading volumes and figures. Bitwise Asset Management’s report was a testament to that. The flawed metric increases the trading volume and results in more liquidity. This in turn, attracts more traders and subsequently, results in higher revenue.

Using Etherscan for the following analysis, Christian Ott, came up with a whole new ranking approach for the altcoin exchanges, but with a twist. The Twitter user excluded native crypto-tokens, while calculating the same. He tweeted,

“Due to wash trading, it is not convincing to rank crypto exchanges by volume. Today, I used a different approach to identify the most important altcoin exchanges and ranked them by the USD value of ERC-20 tokens in their addresses [excluding their own exchange token]:”

Interestingly, the ranking was based on the USD value on exchanges of ERC-20 tokens. Besides, the main purpose of the native token is to increase the utility of the respective ecosystem and it is easy to create misleading and artificial activity in the marketplace of the in-house token. Even as the above methodology does not necessarily provide a conclusive picture, it can be touted to be a unique approach to combat potential figures driven by wash trading.