Bobby Ong, Co-Founder and COO of CoinGecko, sat down in an interview with Boxmining on 4th August 2020. They talked about Decentralised Finance (DeFi), Decentralised Exchanges (DEX), whether 2020 will be a breakout year for a bull run, and more.
What is CoinGecko?
CoinGecko is a Singapore-based company founded in 2014 by TM Lee and Bobby Ong. It is one of the most popular cryptocurrency data aggregators today. Apart from tracking price, volume, and market capitalization, the platform also records community growth, open-source code development, major events, and on-chain metrics. Basically, Coingecko helps its users quantitatively evaluate and rank crypto assets.
Here’s some of our KEY TAKEAWAYS from the interview. You can also watch it here:
DeFi Wave – Decentralized finance on the rise
According to Ong, the DeFi momentum isn’t slowing down. He believes that DeFi still presents enormous opportunities to democratize financial services to everyone. He also said that Q2 2020 was exceptionally great for DeFi tokens and now it’s everyone’s favorite. Meanwhile, we’ve seen CoinGecko FINALLY answering our prayers for the past few weeks and creating a DeFi coin ranking.
Trends and Challenges
In terms of trends, Q2 and Q3 2020 are going to be all about DeFi. When doing analytics, the team found that Uniswap was the most popular exchange in Q2. Everyone in July 2020 everyone was just looking at Uniswap and in fact it was even more popular than centralised exchanges, solidifying their view that DeFi is going to be the hottest trend.
In terms of challenges, he believes that adding DEXs to the CoinGecko platform was definitely a big challenge because they do not have a rest API. So CoinGecko cannot just integrate DEXs just like how they used to add centralized exchanges. Ong and his team spent a lot of time trying to figure out how to get all of the data from DEXs onto CoinGecko. But they have finally overcome this challenge and found a solution to getting the on-chain data and integrating it with Coingecko. That is why CoinGecko can now show data for Uniswap, Balancer, Gnosis Protocol and other many DEXs.
How does CoinGecko identify scam cryptocurrency projects?
Initially, to ensure users get the most complete info, CoinGecko would be very lenient in listing the information of any coin listed on any exchange, including DEXs. However, they discovered a lot of scam coins showing up on Uniswap. For example, some people would create new tokens, list it on Uniswap, provide some liquidity to attract others to buy, and after a while take out all the liquidity leaving people with bags of tokens that can’t be sold.
Hence CoinGecko had to tighten their policy on what information is listed on their platform. Now they have a blanket policy whereby they will not list coins that are only traded on Uniswap unless it is properly checked and vetted by the CoinGecko team. And they do this by contacting the project itself.
Ong also notes that Uniswap is working on compiling an maintaining a decentralised list of legitimate coins which other aggregators such as CoinGecko can contribute to so that users can watch out for fake coins which are listed on Uniswap. This is a good sign, as it means there is clearly an effort to tackle these scam projects by different platforms.
How does CoinGecko tackle fake volume on exchanges?
As for fake volumes on cryptocurrency exchanges, CoinGecko does something unique, which is to look at order book spread and ±2% depth for each trading pair cited on CoinGecko. When CoinGecko first looked at order book depth a year ago, they found numerous instances where an exchange would report millions in trade volume, but the volume was clearly created by bots. Worse still, when you do put in an order, it would trigger the bots to stop trading. Hence, in reality, you can’t even actually trade $10 of coins in there!
Ong considers that Automated Market Makers (AMM) such as Uniswap or Balancer are game changes because so long as there is liquidity inside the pool, there is real depth. And even if the price may not always be the best, users can still know for sure whether there is some liquidity in there. Though save of course, if the token creators are trying to pull an exit scam as mentioned above.
Is this a bull run?
Talking about the growing demand for DeFi protocols, Ong said that everyone in the crypto space wants to witness the same 2017-18 bull run phase. He said, “The next six months will be crucial in determining whether we are going to enter the bull run or not. I think we are still in the early innings like maybe the first base of an actual bull run.” His reasoning behind this stems from observations on the number of page views on his platform. He noticed that in the past year or so they have around 15 million monthly page views and the growth was quite stagnant. However, in the past 1 or 2 months, they have noticed the traffic has increased by around 1.5 to 2 times. He considers that the increase in traffic on CoinGecko can be attributed to existing cryptocurrency enthusiasts looking into DeFi, but we are not at the stage yet where outsiders are coming in and checking out cryptocurrency like in 2017. Therefore, according to Ong, the market hype is real, but we are not seeing a massive bull run yet.
We asked Ong a bit more on this. Does he think we are entering a bull market, or is this just a fakeout zone where prices will just eventually dip like some of the short-lived hypes in 2019? Ong admits he does have a conservative side, but at the same time, a part of him feels we are almost there for the next bull run. This is because if we look at a typical cycle, bear markets usually last between 3-4 years, and we have already been in a bear market since 2018. Finally, he also mentions his friend’s observations from analysing Bitcoin’s weekly charts that 2020 won’t be a breakout year, but rather it would likely be in 2021. Ong agrees with this analysis and certainly sees we are building ground and setting the scene for a 2021 bull market.