DefiLlama ranks crypto exchanges on reserves and execution, not volume

DefiLlama announced the launch of its new REAL Ranking tab on September 16, providing an alternative to the exchange leaderboard, which was mainly based on reported volume.

At the time of writing, the live ranking was showing 59 different exchanges, ranked based on their reserves, execution, activity, and liquidity. This provides traders and institutions with a way of estimating how much of the market activity of a given exchange could actually be verified.

This comes at a time when competition among trading venues has moved beyond just turnover rates. Decentralized exchanges are on the rise, regulated platforms implement 24/7 trading in crypto derivatives, and regulators are still working on resolving the issues arising from the discrepancy between jurisdictions. With the launch of its REAL Ranking tab, DefiLlama is raising a more pertinent question: beyond which venue ranks the highest, which indicators are trustworthy.

Why volume is the one figure a venue can print

REAL consists of a mix of four pillars scored between 0 to 100. The contribution of each pillar to the final REAL score is as follows: Reserves at 30%, Execution at 30%, Activity at 20% and Liquidity at 20%. According to DefiLlama, volume is very easy to inflate by an exchange venue, while reserves can be checked either on-chain or via filed numbers; execution is verified using its trade data, and the resting liquidity can be directly checked.