21Shares and CoinGecko have partnered to release “The Global Crypto Classification Standard report,” which aims to provide a standard model for classifying crypto assets. This report is the first phase of their partnership and seeks to categorize crypto assets in a uniform way to help investors and regulators better understand the nuances within the asset class.
Crypto assets vary significantly from one another, making it crucial to have a standard classification system to summarize and comprehend the different assets. The report introduces a methodology composed of three levels of categorization, with each crypto asset falling into one option within each level. The levels include the Crypto Stack, Market Mapping by Sectors and Industries, and a Taxonomy of Cryptoassets.
As an example, the report showcases the categorization of two assets, Bitcoin and Uniswap, across these three levels. Bitcoin falls under the categories of Cryptocurrencies, Infrastructure, Payments, and Cryptocurrency in the respective levels, while Uniswap falls under Decentralized Application (dApp), Decentralized Finance (DeFi), Decentralized Exchanges (DEXs), and Governance Token.
According to Eliézer Ndinga, Director of Research at 21.co, having a standard classification system is essential for investors to understand the commonalities and differences between various crypto assets. CoinGecko’s independent nature and reputation as a one-stop-shop for crypto information made them the ideal partner for this initiative.
In addition to the report, 21Shares and CoinGecko have utilized the proposed methodology to evaluate the Top 100 crypto assets by market capitalization. The classification, done in partnership between the two companies, will be available on the CoinGecko website by summer 2023.
The full report can be found on the 21Shares and CoinGecko websites. This collaboration between 21Shares and CoinGecko provides a framework for systematically ranking and classifying crypto assets based on a research-driven approach, aligning with CoinGecko’s mission as an independent cryptocurrency data aggregator.