CoinGecko and 21Shares offered a Global Cryptographic Classification Standard – a classification system representing a uniform method of categorizing crypto assets. The standard should help regulators and investors better understand the different types of crypto assets and their unique characteristics.
CoinGecko and 21Shares seek to help investors understand the distinctions between various crypto assets
CoinGecko crypto data aggregator and crypto trading company 21Shares have teamed up to introduce a global standard for categorizing crypto assets. Both companies published the Global Crypto Classification Standard report, which offers a uniform method for classifying crypto assets.
This classification system aims to improve understanding between investors and regulators regarding the different types of crypto assets, including the gaps and potential issues that have appeared in the industry in 2022. At the same time, this method also describes the taxonomy of the industry and tries to attract more participants from traditional finance (TradFi).
“Since Bitcoin’s inception approximately 13 years ago, thousands of unique crypto assets and protocols have emerged, each with unique characteristics and different value propositions.”
– Carlos Gonzalez, research analyst at 21Shares owner 21.co
Three key categorization levels
At present, CoinGecko Lists over 12,000 different crypto assets, each with their unique features and characteristics. The classification system offered by the two companies is based on three levels of categorization that differentiate these assets in terms of stack, market sectors, industries and taxonomy.
The Global Crypto Classification Standard classifies crypto assets into three tiers. The first tier focuses on networks and protocols, including cryptocurrencies, smart contract platforms, and decentralized applications (dApps), among others.
The second level groups assets according to their industries and sectors, such as centralized finance (CeFi), decentralized finance (DeFi), metaverse, etc. Finally, the third level focuses on the nature of the assets, whether it is a cryptocurrency, a native token of a specific network, a stablecoin, a derivative token, a governance token or a utility token, among others.
Essentially, the primary purpose of this classification standard is to provide businesses and investors with essential information about a particular network or protocol. In the meantime, he is also trying to help them see the potential problems associated with this project. Last year, several high-profile crypto projects, such as crypto exchange FTX, Celsius Network, and Voyager Digital collapsed within days, driving many investors away from CeFi platforms.
This article originally appeared on The Tokist
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