Purpose of Crypto Rating
It is said that there are more than 7,500 cryptocurrencies around the world as of 2022. While some of them are so famous that they appear in the media every day like Bitcoin and Ethereum, a far larger number of them are altcoins whose continuation of existence is uncertain. Investing in such altcoins is a typical high-risk, high-return investment. While many people achieve a 700% rate of return through wise altcoin investments, some lose half of their principal in a day.
Coin-Labs examines diverse cryptocurrencies to provide objective and updated information for our investors. In addition, we evaluate and index coins based on diverse criteria to assist your investment decision making. Coin-Labs always aims to provide our investors with a better insight through such information and help them make better choices and decisions.
Grade and value indices of cryptos are based on investment data Coin-Labs has collected for years. Specific indices are determined through internal consultation by our advisory panel.
Crypto Rating Site
Coin-Labs is the first website to rate most of the cryptocurrencies listed on Korean exchanges. Since 2021, we have objectively evaluated and graded cryptocurrencies listed on Korean exchanges like Bithumb and Coinone to protect cryptocurrency investors from scam coins. In August 2021, Coin-Labs drew the attention of Korean crypto exchanges when it gave Bananatok Coin (BNA) a score below 1 for the first time, and our crypto rating won recognition as BNA Coin was delisted from every exchange in November the same year due to suspicions on poor operation.
To satisfy investors for their trust in our crypto rating and survey results, Coin-Labs will keep striving to provide accurate information.
How We Evaluate Cryptocurrencies
Coin-Labs evaluates cryptocurrencies largely based on six criteria. The six evaluation criteria, information on utilized indices and acronyms are as follows, and the scores range from 0 to 10.
Crypto Rating Criteria
- Company Activation Rate (CAR)
- Communication Rate (CR)
- Technology Transparency Rate (TTR)
- Development Participation Rate (DPR)
- Listing Ability Rate (LAR)
- Capital Flow Rate (CFR)
Detailed information on evaluation criteria can be found below.
Information on crypto evaluation provided by Coin-Labs does not constitute a solicitation for investment and is solely provided for reference.
1. Company Activation Rate (CAR)
Company Activation Rate indicates the result of evaluation on the status of operation of the company or organization which issued the corresponding crypto. For reference, CAR is the most crucial index in understanding the status of management of cryptocurrency. As we conduct research on cryptocurrencies, we seldom come across cases in which the crypto is listed on more than two exchanges but the company is actually not operating actively. There were even cases when the company was already bankrupt or shell corporations of speculative or market manipulative forces.
CAR is an index that comprehensively indicates such information, and so one should take extreme caution in investing in cryptocurrencies with low CAR. Representative factors considered by Coin-Labs for CAR evaluation are as follows.
- Basic company information such as location of headquarters, jurisdiction of corporation, etc.
- Actual status of corporate contact such as official email address, local phone number, etc.
- Sales/purchase records of the company or organization by period
- Status of cryptocurrency introduction website and official company website
- Recent job postings
- Corporate insurance records
- Whether the company or organization had recently carried out advertisement campaigns through high profile media
- Degree of activation of LinkedIn page of company executives
2. Social Media Activities and Communication (CR)
Communication Rate indicates how well the issuer or developer of the crypto communicates with investors or the outside world through social media. Investors are bound to wonder about a lot of things on what they invest in, such as the progress of development or future plans on listing. And if developers can answer their questions and satisfy their curiosity through social media, investors will build trust in the cryptocurrency. It is highly likely that the trust will serve as the foundation for additional purchases, which then leads to increased value and thereby creating a virtuous cycle.
In this regard, CR can be considered an index that shows the degree of social media activity in a narrow sense, but can be interpreted as the indicator of a virtuous cycle created through communication with investors in a broader sense. Furthermore, CR is also influenced by how much the corresponding cryptocurrency is talked about among investors on social media. Representative factors considered by Coin-Labs for CR evaluation are as follows.
- Types of social media used for communication (Twitter, Facebook, etc.)
- Whether the company uses messaging platforms which allow direct communication (Discord, Telegram, etc.)
- Period and cycle of developers’ postings on social media such as Reddit, Twitter, etc.
- How well the questions are resolved through answers on social media
- Amount of mentions on the cryptocurrency on social media
3. Technological Transparency (TTR)
Technology Transparency Rate indicates the level of how well the technology applied on the crypto is disclosed to the public by the issuing company or organization. In a broader sense, TTR is also an index that evaluates cryptocurrency technologies open to the public in general.
More than 89% of major cryptocurrencies including Bitcoin transparently disclose the technologies applied on their projects such as blockchain through GitHub, allowing investors to better understand the progress of development of such cryptocurrencies. There also exist cases in which outside developers contributed to the acceleration of development of cryptocurrencies by discovering and correcting errors or adopting supplementary measures to code with open source license.
On the other hand, cryptocurrencies issued with malicious intent to manipulate the market tend not to disclose the technologies on GitHub as they do not seek project development from the beginning. If the technology is not made open on GitHub, the corresponding cryptocurrency is bound to receive low TTR. Coin-Labs considers the following factors to evaluate TTR.
- Presence and condition of Whitepaper
- README status
- Commit status
- Project Issue management status
- Number of stars
4. Development Participation (DPR)
Development Participation Rate is the index that represents the actual level of participation of cryptocurrency development team members in the project, and in a broader sense the index evaluates the overall progress of the project. While how passionate the team members are is indeed an important factor, what’s more important is their level of experience and expertise in development. Also, it would be reasonable to expect that the project will be accelerated and be well-prepared if the size of the team is bigger. DPR is a comprehensive index that takes all these factors that impact the actual development process into account. To evaluate DPR, Coin-Labs considers the following representative factors.
- Number of developers participating in the project
- Development team members’ amount of knowledge
- Development team members’ level of expertise
- Ultimate goal of the project
- Current progress of the project
- Amount of time left until completion of project development
5. Listing Ability (LAR)
Listing Ability Rate is an index that indicates how many exchanges the coin has been recognized by. For a certain crypto to be listed on global exchanges such as Binance, Bybit or Coinbase, it should pass extremely complicated tests; that is, for a cryptocurrency to be approved for listing, it should be deemed that it “meets all requirements to be listed” after an extremely long and thorough analysis of cryptocurrency experts. This means that cryptocurrencies listed on more than 40 or 50 exchanges are bound to be better in every aspect than those listed on 2 or 3 exchanges after completing the listing process.
LAR is the index that represents this, and it is the most objective and precise index for representing the current status of a specific cryptocurrency among the six indices. Coin-Labs considers the following factors in evaluating the LAR.
- Whether the crypto is listed on top 10 global exchanges
- Listing status on the entire global market
Coin-Labs currently presents the listing ability of cryptocurrencies by providing the number of exchanges the cryptocurrency is listed on, not the LAR. This is to provide more detailed and intuitive information on listing ability as LAR is an extremely important criterion.
6. Capital Flow (CFR)
Capital Flow Rate displays the general market status of the cryptocurrency. Cryptocurrencies with high CFR are likely to have larger market size and be traded more actively. Furthermore, larger market size means that stable trading is possible, which indicates that the actual value of the cryptocurrency is similar to its intrinsic value with less speculative force in the market. Coin-Labs currently sets BTC as the standard for calculating CFR, and considers the following factors to evaluate CFR.
- Cryptocurrency market cap
- Max supply and total supply
- Recent volume
- Market share
- Investment from large enterprises or institutions
Crypto Rating Sample
The following image is an illustration of our crypto ratings.
Crypto Rating FAQs
How is a crypto rating made?
A cryptocurrency rating consists of 6 items. To elaborate, we evaluate company activation rate, social media activities and communication, technological transparency, development participation, listing ability, and capital flow rate of a crypto and score it on a 10-point scale.
What are the advantages of crypto rating?
An investor may understand the exact value, purpose of development, and possibility of future growth of a cryptocurrency in which he/she is investing
Are all cryptocurrencies with low scores in the rating scam coins?
Are all cryptocurrencies with low scores in the rating scam coins? This is not necessarily true. Like a recently listed cryptocurrency cannot help receiving a relatively low score in a crypto rating, there are exceptions. As such a cryptocurrency is not a scam coin, a low rating score does not necessarily mean it is a scam.
