The issuer of cryptocurrency exchange traded products (ETPs) 21Shares AG and crypto data aggregator CoinGecko have teamed up to publish a global classification standard for the largest crypto assets and demystify the misconceptions about the space.
The "Global Crypto Classification Standard (GCCS)" creates a uniform way to categorize crypto assets, so investors and regulators can better understand the nuances within the asset class. Unlike traditional financial assets, crypto varies drastically from one asset to another – creating a need for a standard way to summarize and understand the different properties.
Different levels of categorization
The methodology introduced by the two teams is composed of three levels of categorization, with each crypto asset falling into one option within each level. These levels include:
- The crypto stack
- Market mapping by sectors and industries
- Taxonomy of crypto assets
While the first two levels mainly focus on the networks and protocols, only the third level applies to tokens. The crypto stack refers to they types of crypto assets that make up the crypto environment. This category includes classification criteria such as smart contract platforms, cryptocurrencies or dApps. Level 2 is further divided into sectors and industries. Last but not least, level 3 tries to classify the assets into their corresponding "superclasses". They are divided into capital assets, store of value or a consumable good/asset.
Clear classification for better comprehension
The initiative is supposed to serve as an industry taxonomy and help investors/regulators better navigate the complex crypto space. It also helps provide clear categorization of the various projects and crypto assets within the space so users can tell at a glance what a project does, and where they sit as part of the larger crypto stack. A full classification of the top 100 cryptocurrencies by market capitalization will be released in the coming months.
“Crypto is still in the early days – but it is key to have a standard way to classify the asset class so investors can understand both the commonalities and differences between the various assets. Upon meeting with CoinGecko, we knew the company’s independent nature and reputation as a one-stop-shop to learn about new projects in the crypto space made them the right partner for this type of initiative.” - Eliézer Ndinga, Director of Research at 21.co
