The San-Francisco based digital asset exchange Coinbase lists thousands of digital assets on its platform every year, starting from established coins like Cardano (ADA) and XRP to utility coins like Golem Network (GNT), Augur (REP), and the BreadWallet token (BRD). But often, the listing process of Coinbase has been questioned by crypto experts and enthusiasts.
When the first ERC-20 tokens were listed on the Coinbase platform, it raised several eyebrows among crypto experts. There were also allegations of conflicts between Coinbase and its investors. To avoid this, Coinbase has announced its modified listing policies, and before any coin is listed on the platform, the exchange will undergo certain evaluation processes from now onwards.
The checklist includes the following:
- Before listing any token on its platform, the San-Francisco based digital currency exchange now evaluates whether the new tokens follow the best industry policies like standard library use, or are secure enough to prevent malicious attacks of hackers or incorporates a simple design to enable coders to modify them with regular updates easily. The exchange also tries to evaluate the source code of the tokens before listing them on their platform. The evaluation of the token’s source code helps the auditors or the IT engineers to gauge the token’s behavior most accurately. A poorly written code can bring in devastating losses for the users. Therefore, Coinbase analyses the code, governance, team, and scalability of the assets before listing them.
- Before listing any asset on its platform, Coinbase now evaluates the mission and values of the assets to see whether it is at par with the mission and policies of the exchange.
- Coinbase evaluates whether there are any risks threatened at the reputation of the exchange for listing the assets. If it perceives any kind of risk, it cancels the listing of that project on its platform.
- Coinbase runs various metrics evaluations to identify the asset’s liquidity and its distribution before listing it on its platform.
- Coinbase also evaluates the market demand for the asset to monitor its adoption and networking effects.
- Coinbase is now focusing on crypto-economics related to a particular asset that gives an idea of user participation and incentivizes the assets to be listed on the Coinbase exchange.
Accordingly, Coinbase has upgraded its listing policies, and from now onwards, any project that wants to be listed on the Coinbase platform has to initiate the application process themselves, instead of Coinbase approaching the corresponding projects directly, which has been the policy in the past.
After receiving the application from a particular project, Coinbase will evaluate the project based on the above mentioned 6 points. If the project passes all those evaluations, then Coinbase will consider its listing on its platform. These periodic checks and documenting code links of the tokens help Coinbase to maintain transparency in their operations through regular audits and security checks.
According to Coinbase,