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NonstopTheo highlights the need for standardization in trade volume reporting for Aave's asset onboarding and risk management, citing the unreliability of current data due to practices like wash trading on Centralized Exchanges (CEXes). He suggests refining Aave's risk methodology by tranching exchange volume into transparent sub-buckets to distinguish between total and "reliable" volume, excluding derivatives exchange data, and screening for fiat volumes and currency pairs.
The discussion primarily revolves around the standardization of trade volume reporting for Aave's asset onboarding and risk management processes, as highlighted by NonstopTheo. He points out the unreliability of current trading volume data due to practices like wash trading and fake volumes, especially on Centralized Exchanges (CEXes). Despite these issues, CEX data remains crucial for DeFi applications as most trading activity occurs through these platforms.
NonstopTheo emphasizes the lack of a universally accepted definition of trading volume in the DeFi community, and the absence of a standard for measuring real exchange trading volume in Aave. He also underscores the importance of CEX trading volumes, citing data from TheBlockCrypto that shows Decentralized Exchange (DEX) trading volume is only 12% of CEX volume. He suggests indicators for identifying fake volume on CEXes and mentions approaches to quantifying reliable CEX trading volumes, such as Messari's Real Volume1.
Using the mid-cap token $ZRX as an example, NonstopTheo illustrates the issue of fake volumes in CEX data, which is vital for token risk assessments. He notes the discrepancies in volume reports from different data sources, such as Messari, Nomics, and CoinGecko. He concludes by suggesting that Aave's risk methodology should consider tranching exchange volume into transparent sub-buckets to qualify total vs "reliable" volume, excluding derivatives exchange data, and screening for fiat volumes and currency pairs. He also calls for more research to refine these methodologies and encourages the Aave community to share their thoughts and ideas1.
Posted a year ago
Last reply a year ago
Summary updated 2 months ago
Last updated 08/12 04:39