CoinGecko and 21Shares propose global crypto classification standard

Major cryptocurrency information aggregator CoinGecko and crypto concern steadfast 21Shares person joined forces to motorboat a planetary modular for classifying assorted types of cryptocurrencies.

On Feb. 8, CoinGecko and 21Shares released The Global Crypto Classification Standard report, proposing a azygous method to categorize crypto assets. The effort aims to assistance investors and regulators amended recognize the specifics of each plus people successful crypto, including imaginable failures similar those seen by the manufacture successful 2022.

“Since Bitcoin’s inception astir 13 years ago, thousands of unsocial crypto assets and protocols person emerged, each with unsocial characteristics and antithetic worth propositions,” Carlos Gonzalez, probe expert astatine 21Shares’ genitor steadfast 21.co, told Cointelegraph, adding:

“Unlike accepted fiscal assets, cryptoassets tin alteration dramatically successful nature, some arsenic it relates to the plus itself and the protocol down it.”

At the clip of writing, determination are much than 12,000 divers crypto assets listed connected CoinGecko’s website, with each coin having its unsocial characteristics and features. CoinGecko and 21Shares’ classification modular is based connected 3 categorization levels, differentiating these thousands of assets by stack, marketplace sectors, industries and taxonomy.

The archetypal level, dubbed “Crypto Stack,” breaks down crypto assets into classes similar cryptocurrencies, astute declaration platforms, centralized applications, decentralized applications, interoperability blockchains and others. The methodology lone refers to networks oregon protocols successful the archetypal 2 levels alternatively of the underlying token.

Six examples of “Crypto Stack” classification. Source: 21Shares and CoinGecko

The 2nd level, called “Market Mapping by Sectors and Industries,” further divides cryptocurrencies by segments similar infrastructure, metaverse, decentralized concern (DeFi), arsenic good arsenic groups similar outgo platform, lending, developer tooling and others. As immoderate protocols mightiness acceptable into aggregate industries, the methodology attempts to spot the assets successful the astir applicable class successful specified cases.

The 3rd level, “Taxonomy of Crypto assets,” classified crypto assets according to related plus “superclass,” based connected the cryptocurrency taxonomy strategy proposed by crypto expert Chris Burniske successful 2019. Burniske’s strategy follows Robert Greer’s 1997 insubstantial “What is an Asset Class Anyway?” categorizing crypto assets crossed their superclasses similar superior assets, consumable oregon transformable assets and store of worth assets.

Some of the examples successful the store of worth plus class see Bitcoin (BTC), Monero (XMR), Zcash (ZEC) and Dogecoin (DOGE). This benignant of crypto assets “cannot beryllium consumed; nor tin it make income. Nevertheless, it has value; it is simply a store of worth assets,” the projected classification modular reads.

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CoinGecko and 21Shares’ effort to bring a planetary crypto classification modular is 1 of galore planetary efforts to categorize cryptocurrencies. On Feb. 3, the Australian Treasury released a consultation insubstantial connected “token mapping,” aiming to have its ain taxonomy of crypto assets. Previously, Belgium’s Financial Services and Markets Authority was besides seeking feedback connected its classification of crypto assets arsenic securities, concern instruments oregon fiscal instruments successful July 2022.

“While the classification of integer assets is rather commonplace, galore classification efforts are one-dimensional and confuse accepted investors by mixing crypto assets — the investable tokens — straight with the protocols down them,” Gonzalez said.

The exec besides expressed assurance that 21Shares’ collaboration with CoinGecko — a large autarkic crypto information website — volition let the recently projected modular to entreaty to some retail and organization investors, arsenic good arsenic policymakers crossed the world.