Nomics and Nexo have teamed up to develop an algorithm for evaluating the reputation of cryptocurrency products. Products in 23 categories will be ranked based on posts on Twitter, Reddit, blogs, and other sites.
Nomics and Nexo will develop an algorithm for evaluating the reputation of cryptocurrency products. Products in 23 categories will be ranked based on entries on Reddit, Twitter, blogs, and other sites.
The cryptocurrency data aggregator Nomics has joined forces with the provider of crypto-asset-backed loans Nexo to create an algorithm that evaluates the reputation of cryptocurrency products. The Nomics algorithm scans the Internet for product mentions, and then gives it a score from 0 to 1,000. Nomics will publish a beta version of these ratings on its website.
Nomics CEO clay Collins noted that the industry needs such ratings, but the development of the project was very expensive, which made it necessary to look for a partner to create the algorithm. Collins sees reputation assessment as the best way to rank cryptocurrency products.
Nomics ranks cryptocurrency products by category. The aggregator currently provides ratings in five categories: wallets, loans, tax services, custodial solutions, and over-the-counter (OTC) trading. The startup uses an algorithm to approximate reputation by sorting referral links, posts on Reddit, Twitter, blogs, and other online sources.
“There are a lot of blog articles from inexperienced authors who make up their own product ratings, mostly consisting of garbage,” Collins said. “We want to make recommendations for the industry that go beyond all these blog articles that don’t really take the user’s interests into account.”
Note that the rating does not necessarily evaluate which product is the best. “The purpose of the algorithm is not to say who is the best in their field. First of all, we look at how the market evaluates the product,” said the CEO of Nomics.
For example, Nomics is currently rating 63 cryptocurrency wallets. Blockchain.com ranks first in this list with a reputation score of 994. A score from 0 to 1,000 is more detailed than a score from 0 to 10, and allows Nomics to more accurately rank dozens of products in a single category. Nomics rating by Blockchain.com includes more than 16,000 links and more than 5,000 Twitter posts.
“We draw conclusions from mentions on Twitter, on Reddit, and even on random web pages. We review each link to a product page or home page, and try to evaluate the reputation of incoming links. Then we find out which of these products the market considers most important. This is the essence of our algorithm, ” Collins said.
However, incoming links have different weights. Nomics claims that the ranking algorithm takes into account the” perceived authority ” of each link and post on Twitter. For example, a link on the Google home page weighs much more than the home page of a random blog maintained by an unknown author. Nomics updates its rating every 24 hours.
To prevent manipulation that misleads the algorithm, Nomics does not plan to disclose information about how pages are weighted until the project is out of beta. The company may also continue to change the algorithm during and after the testing period.
Nomics emphasizes that the ratings are “unbiased”. This means that the company applies the same algorithm to all categories. Note that Nexo became the most popular product in the credit category with a rating of 969. Collins claims that Nomics began working with Nexo after the firm took the first place.
Once Nomics fills in the five initial categories, the company will launch two additional categories per week until it reaches a total of 23 product categories. After that, the firm plans to hold an annual virtual award ceremony to celebrate the best-in-class products. The first ceremony, according to Collins, is scheduled for September.
Recall that in December 2018, Nomics received funding in the amount of $3 million, and in April this year introduced an AI-based service for a seven-day forecast of the rate of 100 cryptocurrencies.