In the modern crypto space, projects are emerging and flying to multi-million dollar market capitalizations without sufficient documentation to let investors know what their plans for the medium-to-long-term future are. Many token sales in recent times have been based on standardized token formats, speculative value, and limited or non-existent use cases.
To further complicate things, the SEC and other regulators around the world have begun to consider this innovative space a flight risk to novice investors. In an effort to help reduce stigma, Weiss has undertaken the task of rating the world’s top 20 cryptocurrencies (based on market cap) The report which contains these rating was made public on Jan. 24th 2018.
What sets Weiss ratings apart from others?
Weiss has a hard-and-fast stance on non-biased ratings. Their subscription pages state their promise to subscribers:
Our Solemn Promise to You…
WEISS RATINGS WILL NEVER:
- Accept compensation from any company we rate
- Accept any advertising from any company we rate
- Give a company the opportunity to preview their rating
- Allow a company to suppress publication of their rating
Over the course of the last 40 years, Weiss has been regarded by the U.S. General Accounting Office, New York Times, Wall Street Journal, and other sources for their independence and accuracy of ratings.
Why are standard ratings so important?
Standard ratings allow more traditional and novice investors to gain a feel for the projects they may be investing in, creating a more transparent and welcoming environment. This investor-friendly environment could also help to pave the way for widespread adoption of the underlying technologies.
Standard ratings also allow regulators, community members, and contributors to more easily filter out legitimate projects from honest to goodness scams or high-risk opportunities.
Firms such as Standard and Poor, Moody’s, and Fitch Ratings have previously been responsible for long-term credit ratings, but Weiss has avoided some of the pitfalls that these magnates have fallen into. Namely, Weiss stands firm against accepting compensation from any firm they have or are going to review. Compensation in this context can even mean advertising.
What are the ratings based on?
According to the publicly available information at the time of writing, Weiss will be using metrics such as use cases, core technology, trading patterns, financial data, and much more. It is often stated that when it comes to investing and finance, that secondary data is a great way to model long-term growth, but using secondary knowledge requires lots of data points to be connected.
Even if most people do not use them due to an abundance of experience, these ratings can still help to maintain an open line of communications between regulators and the blockchain industry.