How Coinbase’s GDAX Intends to Evaluate Digital Assets for Exchange Listing
Coinbase’s Global Digital Asset Exchange (GDAX) released its Digital Assets Framework, an answer to clients urging more cryptocurrency choices. The popular institutional exchange is attempting to meet demand while sifting through an initial coin offering (ICO) market numbering in the hundreds and valued in the billions.
Also read: GDAX Announces It Will Absorb Investor Losses From Recent ETH Flash Crash
GDAX Sets Crypto List Standards
“This framework is designed to provide insight into how we evaluate digital assets for listing on GDAX,” the statement begins. The exchange reserves “full and absolute discretion to list, not list, or de-list any asset for trading on GDAX,” which seems to undercut the rest of the document.
Framework, nevertheless, is a rubric, outlining listing determinations through six factors: alignment with exchange values, general network assessment, laws and best practices, price manipulation metrics, adoption/network effect, and incentivizing participants.
Under Economic Freedom, for example, they stress “how easy it is for members of a society to participate in the [token] economy.”
From Hundreds of Coins to Proven Winners
“Has a track record of demonstrable success or experience,” is required within Founders and Leadership. “GDAX will apply know-your-client standards to publically visible founders or leaders,” they stress.
Crucially, it appears, future coin listings “would not affect Coinbase or GDAX’s ability to meet compliance obligations, which include Anti-Money Laundering AML program and obligations under government licenses in any jurisdiction e.g. Money Transmitter Licenses.”
“For service or work tokens,” the Circulation heading notes, “new supply is created through consensus protocols. If the supply is capped, then a material amount of the total tokens should be available to the public.”
External Stakeholders are also important, requiring “investments from venture firms or hedge funds which have experience working with crypto companies or projects.”
Team Ownership means stakes “retained by the team is a minority stake. There should be a lock-up period and reasonable vesting schedule to ensure the team is economically incentivized to improve the network into the future.”
The math is simple, explains GDAX’s Adam White: “The number one feedback I’d say we get from customers is, ‘add more things, I want to trade more assets.’ We see those customers going to other venues, and we don’t want that to happen.”
What is your opinion of GDAX’s criteria? Tell us in the comments below!
Images courtesy of: Pixabay, GDAX.
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