CODEX

Market depth is a metric, which is showing the real liquidity of the markets. Due to rampant wash-trading and fake activity - volume currently isn't the most reliable indicator in the crypto space.

It's measuring 1% or 10% section of the order book from the midpoint price (1%/10% of the buy orders, and 1%/10% of the sell orders).

It's important, because measurement of the whole order book is going to give false results due to extreme values, which can make false illusion of liquidity for a given market.

By default Market depth is showing the most liquid markets sorted by Combined Orders (which is a sum of buy and sell orders). This way it provides the most interesting information already. Left (green) side of the market depth bar is showing how many buy orders are open, and right (red) side of the bar is showing how many sell orders are open (both can be recalculated to BTC, ETH or any fiat we have available on the site).

Due to rampant malicious practices in the crypto exchanges environment, we have introduced in 2019 and 2020 new ways of evaluating exchanges and one of them is - Confidence. Because it's a new metric - it's essential to know how it works.

• Based on the liquidity from order books (75%) - including overall liquidity and market depth/volume ratio, volumes included, if exchange is low volume (below 2M USD volume 24h)

• Based on web traffic (20%) - using Alexa rank as a main indicator of site popularity

• Based on regulation (5%) - researching and evaluating licensing for exchange - by respective institutions

• Adding all of these subscores give overall main result - Confidence

Confidence is mainly based on liquidity, because it's the most important aspect of cryptocurrency exchanges. Without liquidity there is no trading, illiquid markets tend to collapse in the long term. Besides liquidity - there is also an additional factor in calculation of score - market depth/volume ratio. If volume is huge (especially when it’s growing much faster than liquidity), and market depth seems to not keep pace with - it's reducing overall score. Exchanges that keep market makers liquidity with expanding volume are those that keep all ratios in-tact and have overall score above 75-80% (it means that they have all liquidity ratios above minimum requirements, high web traffic participation, and are often regulated).