Messari is on a mission to rid cryptoland of the scourge of fake data. If it succeeds, it could lead us to the promised land of ETFs and S&Ps—and those elusive institutional investors.

The open-source, EDGAR-like database for crypto assets upped its game earlier this week, when it announced the launch of its “Real 10 Volume” service. The Real 10 is a list of the top 10 crypto exchanges that Messari vets—each has reported “significant and legitimate” trading volume.

The Real 10 is part of the suite of products that Messari offers on its OnChainFX dashboard, and the numbers you’ll see there are very different from the ones you’ll find on incumbent crypto-data go-to CoinMarketCap—which is exactly the point.

Messari’s opportunity

The company, based in New York, is comprised of an impressive squad of 10 industry-savvy vets from across the business and tech worlds. Co-founder Dan McArdle was a founding member of the Digital Currency Council, and Messari CEO Ryan Selkis previously led the restructuring and conference-hosting efforts at CoinDesk prior to holding an “entrepreneur in residence” position at ConsenSys (Decrypt’s source of funding).

As a whole, Messari can be thought of as a “collection of qualitative and quantitative data,” explains Messari Research Director Eric Turner, a former financial technology research analyst at S&P Global.

The idea is to add “context,” he says, on the quantitative side through robust metrics that the company provides on its OnChainFX platform, while also working to bring transparency to the industry through initiatives like its Disclosures Registry. The registry currently includes around “80 data points” for 20 companies, says Turner, and serves to provide key details about each company, such as its team, verified social media, white papers, blockchain audits, and any smart contracts that they’ve run.

“It’s more in-depth information that you would get in the public [sphere] easily, at least on token sales and the vesting schedules attached to the token,” he says.

At the moment, everything on Messari is free and available to anyone—but that will soon change, says Turner.

While the registry data “will always be free for anyone to use,” Messari is set offer a subscription-based service for both retail and power users with new tools and features as part of Messari Pro in Q2, he says.

Eventually, the plan is to have a “fully featured market-intelligence product for institutions” as well.

And for data vendors like Messari positioning themselves as more reliable alternatives, CoinMarketCap’s margin (for error) is their opportunity.

Fake data

Messari’s rollout of the Real 10 came fresh on the heels of the blockbuster Bitwise report that discovered, among other things, that 95 percent of all reported crypto trading volume is as real as the Easter Bunny.

And the timing wasn’t at all coincidental, says Messari Research Director Eric Turner: “The Real 10 itself was inspired by the recent Bitwise report that came out. We saw what they were doing and it aligned with a lot of the things that we had been thinking about.”

The project wasn’t born overnight. Messari has been working on it in the background for some time, says Turner. “We've always pulled our market price information from a select group of exchanges. We've always focused on trying to figure out where we can get legitimate information and where can we get the best information.”

Messari’s list of the Real 10 match up with the exchanges that Bitwise determined were the “only 10 exchanges that have [more than] $1 million real daily bitcoin trade volume:” Binance, Bitfinex, Bitflyer, Bitstamp, Bittrex, Coinbase Pro, Gemini, itBit, Kraken, and Poloniex.

Turner says, however, that Messari plans to expand on this list in the near future. “We know that they are not only 10 ‘legitimate’ exchanges in this space. There are more. But we just need to go out and conduct that additional due diligence.”

What that means is Messari will tackle its Real Volume project the same way it put together its Disclosures Registry for token projects: convincing crypto companies—that are at times, er, overly suspicious—that it’s in their best interest to open up their books to the revealing light of day and let the market separate what’s real from what isn’t.

“We’re also starting to go out and speak to exchanges about getting more detailed information from them—trying to figure out if there’s a way we can use zero-knowledge proofs to get proof of reserves without them actually exposing keys to us or something like that,” Turner says.

Of course, clean data is a two-way street. But Turner says much of the responsibility to supply the market with accurate data falls on the shoulders of the providers themselves—like CoinMarketCap, and now Messari—and not the individual companies and exchanges.

“If you’re running a business, and things are working, rarely do people take the time to step back to think, ‘Well, how can we be doing this better?’ What kind of different methodologies could we use?’”

These companies are just trying to run their businesses and make money, he says, and most of them do try to be transparent, but much of it gets lost in the noise. Reports of a project’s progress will get sent out over a “Medium post, or a random Github update, and these things don’t get disseminated to the public the way that they should.”

It’s up to the data providers to lead the way, says Turner, and while CoinMarketCap has been “an incredible resource for this space,” it hasn’t done enough to “suss out some of these real volumes and better pricing information and push on exchanges to be more transparent.”

Only then will the regulators and institutional investors come around.

When Bitcoin ETF?

A consistent roadblock in the approval process for every Bitcoin ETF proposal that has been put before the SEC to date is the lack of assurance—both for regulators and investors—that Bitcoin is “free from the risk of [price] manipulation,” according to statements made by Chairman Jay Clayton last November.

That is never going to change—unless the industry cleans up its act and can be deemed credible.

“Institutional investors are not going to touch this space if they can’t trust the information that’s out here,” says Turner. The cryptofunds that exist today that made up of “crypto-native and capable people” who know how to piece together information from different sources and invest enormous amounts of capital on data teams in order to build their decisions, he says.

“A large institution isn’t going to waste its time. They’re very used to having it available—‘we’ll subscribe to Bloomberg, we’ll subscribe to S&P. We can trust this data and we can easily get an analyst go in right away and start modeling out some of these things.’”

Giving institutional investors and regulators the confidence they need to trust crypto is a big part of what Messari is doing, say its research director. And, judging by the response the Real 10 has received so far, it’s off to a very good start.

Exchanges, normally the ones on the receiving end of requests from token projects eager to get their coins indexed, are now the ones knocking on Messari’s door.

Says Turner: “They’ve been reaching out to us and asking, ‘OK, how do we get listed?’”