Introducing the Talos Exchange Scorecard

An exchange may serve multiple uses — as a liquid trading venue, as a source for pricing and market activity, as a platform to custody assets, and as a programmable interface for automated trading and data collection. But objectively measuring quality across these dimensions is inherently challenging. Without a principled methodology, assessments of 'quality' tend to be subjective, use-case dependent, and prone to bias.

The Talos Exchange Scorecard addresses this by translating abstract notions of exchange quality into six measurable pillars: 

• Data Quality 
• Liquidity 
• Regulatory Compliance, 
• Transparency 
• Resilience & Security 
• API Quality 

Each pillar is assessed through a combination of quantitative tests and qualitative indicators, applied uniformly across each type of exchange. These scores are then translated to an interpretive grading scale to give an intuitive sense of relative quality. 

The primary data source is Talos's own market data collection built and maintained across 50+ exchanges over eight years. This is supplemented by Talos's operational experience building and maintaining market data pipelines, a review of academic and industry literature on market structure, and public disclosures from exchanges. 

The overall scoring is designed to be a holistic guide and can be deconstructed for different use cases. Scores are published at the category level so users can apply their own weighting depending on context. For example, institutional trading firms looking for the most efficient trade execution may overweight Liquidity, while data intensive applications may overweight Data Quality. Talos uses the Exchange Scorecard to select constituent exchanges for our prices, indexes and metrics.

The Talos Exchange Scorecard has been adapted from the former Coin Metrics Trusted Exchange Framework.

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