CoinGecko and 21Shares have proposed the Global Cryptocurrency Taxonomy, a taxonomy representing a unified approach to classifying crypto assets. The standard is expected to help regulators and investors better understand various types of crypto assets and their unique features.
Crypto data aggregator CoinGecko and crypto trading firm 21Shares have teamed up to launch a global standard for classifying crypto assets. The two companies released the Global Cryptocurrency Taxonomy Report, proposing a unified approach to classifying crypto assets.
The classification system is intended to improve investors' and regulators' understanding of different types of crypto assets, including any potential pitfalls and issues that arise in the industry in 2022. At the same time, the methodology also outlines industry classifications and attempts to attract more players from traditional finance (TradFi).
Currently, CoinGecko lists over 12,000 different crypto assets, each with its own unique characteristics. The classification system proposed by the two companies is based on a three-level classification to differentiate these assets by stack, market sector, industry and taxonomy.
The Global Cryptocurrency Taxonomy divides crypto assets into three levels. The first layer focuses on networks and protocols, including cryptocurrencies, smart contract platforms, and decentralized applications (dApps), among others.
The second layer groups assets according to their industry and domain, such as centralized finance (CeFi), decentralized finance (DeFi), metaverse, etc. Finally, the third layer focuses on the nature of the asset, whether it is a cryptocurrency, native network-specific token, stablecoin, derivative token, governance token, or utility token, etc.
Essentially, the main goal of this taxonomy is to provide companies and investors with fundamental insights into a particular network or protocol. At the same time, it also tries to help them see any potential issues with the project. Last year, several high-profile cryptocurrency projects, such as cryptocurrency exchanges FTX, Celsius Network, and Voyager Digital, collapsed within days, causing many investors to stay away from CeFi platforms.
