In order to establish a universal standard for categorizing different crypto assets, major cryptocurrency data aggregator CoinGecko and cryptocurrency investment company 21Shares have teamed up.
The Global Crypto Classification Standard report, which suggests a standardized system to identify crypto assets, was issued by CoinGecko and 21Shares on February 8. The initiative wants to aid regulators and investors in comprehending the specifics of each crypto asset class, including prospective disasters like those the industry saw in 2022.
The classification methodology used by CoinGecko and 21Shares is based on three levels of categorization, allowing for the separation of these enormous amounts of assets by stack, market sectors, industries, and taxonomy.
The first level nicknamed “crypto stack,” breaks down crypto assets into classifications such cryptocurrencies, smart contract platforms, centralized applications, decentralized applications, interoperable blockchains and others.The underlying token is not mentioned in the process; only the first two tiers’ networks or protocols are.
The second level, referred to as “market mapping by sectors and industries,” further splits cryptocurrencies into categories like payment platform, lending, developer tooling, infrastructure, metaverse, and decentralized finance (DeFi). The methodology makes an effort to classify the assets in the most pertinent category in situations when some protocols may be applicable to numerous sectors.
Based on the cryptocurrency taxonomy scheme put forth by crypto researcher Chris Burniske in 2019 and referred to as “taxonomy of crypto assets,” the third level classified cryptocurrencies in accordance with related asset “superclasses.”
One of the international initiatives to categorize cryptocurrencies is that being made by CoinGecko and 21Shares. In an effort to create its own taxonomy of crypto assets, the Australian Department of the Treasury published a consultation paper on “token mapping” on February 3. Earlier, the Financial Services and Markets Authority of Belgium asked for comments on the July 2022 classification of cryptocurrency assets as securities, investment instruments, or financial instruments.
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