Today we hear from Nomics CEO Clay Collins. It’s an excerpt from a 2018 interview recorded with Vortex of Crypto Cast Network. Clay lists some of the challenges to getting good crypto market data – namely decentralization, inaccessibility, and inconsistency – and explains how Nomics deals with each. For the full conversation, check out Flippening episode 27.
Links Relevant To This Episode
- Nomics on Twitter
- Clay Collins
- Nomics API
- Nomics’ Fully Customizable Daily Crypto Newsletter
- Crypto Cast Network
- Bitcoin (BTC)
- Ethereum (ETH)
- Basic Attention Token (BAT)
- Tether (USDT)
- TrueUSD (TUSD)
Clay: Welcome to Daily Wisdom from the Flippening Podcast. These episodes feature short, to the point clips from our full-length interviews. We talk to the men and women behind the trades, crypto exchanges, and regulations with the goal of helping you become a better, more informed investor.
Michael: Hi I’m Michael Kaplan, editor of the Flippening Podcast. Today we hear from Nomics CEO Clay Collins. It’s an excerpt from a 2018 interview recorded with Vortex of the Crypto Cast Network. Clay discusses how Nomics addresses challenges to [00:00:30] getting good crypto market data–namely decentralization, inaccessibility, and inconsistency. For the full conversation, check out Flippening episode 27.
Without further ado, Nomics CEO Clay Collins with Vortex of the Crypto Cast Network. Enjoy.
Vortex: So then let me ask you, Clay, maybe you could just go into a little bit more detail with, for me and the audience, about these issues that you say that most of these exchange data APIs have. There’s not a whole lot of them out there. I mean, there are only a few, so it does kind of make sense to go into that particular market, [00:01:00] there are only a few. I’ve personally found that they’re not super great. I know you guys are traders and into bots and things like that, and we’ll get a little bit more into that, so you really want the robustness, but maybe you could go into some actual detail or maybe even some experiences of some of these other data APIs that were so bad that you wanted to actually start your own.
Clay: Absolutely. I think a good place to start with this is just Nomics.com. There are some things, I think, [00:01:30] that I don’t know that most people will see just right off the bat, but are pretty apparent. If you go to Nomics.com, one thing that I think pops out to folks who are pretty deep in this space is the fact that you can denominate the entire dashboard or any of the pages on our website in any fiat or, quote, “currency.” It’s not just about Bitcoin, Ethereum, USD, Korean won. You can denominate any of our pages in any of the currencies. You can constantly shift back and forth between where’s the [00:02:00] center of the universe. That’s a pretty big deal.
Another big deal is that on our homepage, on our dashboard, you can view that page in a variety of different time intervals. Again, I think that’s something new. I think the core problems fall into three different categories. The first category is data consistency, the second category is data accessibility, and the third problem that we solve is data decentralization. Maybe data decentralization is a great place to start.
[00:02:30] When we first started operating in this space–this was about 10 months ago–we found that if we integrated with 11 exchanges, we could get 50% of the volume in the space exchange volume. Now, about 10 months later, we need to integrate with about 40 exchanges to get 50% of the exchange volume, so in a matter of like 10 months, we needed to almost 4X the number of exchange integrations in order to capture [00:03:00] that 50% of market volume. Of course, we have plans to integrate with a lot more than that.
We’re seeing this problem that hedge funds and traders not only need to build new integrations with exchanges, but they need to constantly be sort of swapping out the exchanges that they integrate with in order to maintain a decent picture of what’s happening in the space.
One interesting statistic is that of those roughly 40 exchanges that comprise 50% of volume in the space, [00:03:30] about 40% of those were started in 2017 or later. We know that Binance has only been around for about a year, and about 11% of those 40 exchanges that comprise 50% of the volume in this space, 11% of those exchanges were started in 2018. It’s just absolutely crazy how much work someone has to do if they want to stay on top of data in this space.
One of the reasons why we built Nomics was we found that traders, [00:04:00] or hedge funds, or family offices and institutional investors, would hire a data science person to find opportunities in the datasets. But instead of spending their time actually finding opportunities, they were spending all of their time cleaning up data, maintaining that data, normalizing that data, instead of actually making money with it. That’s the decentralization problem, is that it’s just becoming more and more dispersed over time. That’s one problem we solve.
The second problem that we solve [00:04:30] is data accessibility. We’re finding that a lot of these exchanges and data sources, in general, are becoming more and more rate-limited over time, so more and more stingy about how much access they’ll give you to their data. We found this out the hard way the other day when we decided to reingest all of our trades on Bitfinex and found that it would take about six weeks to ingest all the historical data on Bitfinex. If you’re a fund and you’re looking to [00:05:00] analyze a trade, be prepared to sit behind some of these rate limits for weeks at a time in order to be able to backtest your strategy and figure out if it’s going to work.
Data’s becoming less accessible, and there’s just becoming more and more of it. We have billions of trades now, and it’s just not possible to store that entire trade history on your laptop, so it has to be in the cloud. For most funds and most investors, it needs to be immediately accessible rather than accessible after six weeks [00:05:30] of ingestion, and you might have gaps, and you might miss some of it.
The third problem that we solve other than the decentralization and accessibility problem is this consistency problem. We see exchanges change tickers, day in and day out change your data schemas, all kinds of things. One of the examples there is we have a customer that operates a real-time trading environment, and they were looking at an arbitrage opportunity around BAT. The only problem is that BAT, [00:06:00] on one of the exchanges where they were looking to make the trade, was Basic Attention Token, and on another exchange, it was Batcoin. It looks like a potentially huge opportunity until you realize that these are very different tokens.
Another example of this, we were looking at an exchange that listed a pair called USDTUSD, and they didn’t delimit between what the two coins were. That’s either Tether to USD or USD to TrueUSD. You just don’t know, [00:06:30] and so you can beat your head against the wall trying to figure this out.
Another issue is just timezones. I tell people we’re sort of a boring basics kind of company. There’s a lot of fancy distributed things that are happening. We’re really about nailing the bread and butter and getting the boring basics right because we think that kind of utility company approach is what’s needed to be successful here. We see trades being stamped with Korean timezones, UTC, across the board. In many cases, the APIs don’t even tell you what timezone they’re happening in. [00:07:00] Also, these times have various levels of precision, so sometimes it’s to the millisecond, sometimes it’s to the second, sometimes it’s to the minute. It’s just really frustrating to figure out what’s happening in this space, so these are the types of problems that we solve, and they really fall into those three categories.
Vortex: Yeah, so it sounds like one of the biggest problems is the fact that it’s just so early days. We don’t have a whole lot of institutional data or at least institutional quality data. [00:07:30] It sounds like one of the missions that you guys are doing is to literally clean up data for the entire space, for the entire crypto space. That would be awesome, because, like you say, there is just so much fragmentation right now.
Clay: That’s it for today. If you like what you heard and want to support the show, please consider leaving us a review on iTunes, Stitcher, or wherever you listen to podcasts. If you decide to leave us a review after subscribing, we’ll send you a free Nomics T-shirt. Just hit us up on Twitter @NomicsFinance [00:08:00] after you’ve left a review and we’ll hook you up. You may also be interested in nomics.com, our crypto market cap and pricing website, check us out at nomics.com. Now, stick around for our legal disclaimer.
All opinions expressed by podcast hosts or guests are solely their own opinion and do not reflect the opinion of Nomics or any other company. This podcast is for informational and entertainment purposes only and should not be relied upon as the basis for investment decisions.
The producers, hosts, and guests of the show may maintain [00:08:30] positions in the companies or assets discussed today.