The Complete Guide to Data Providers: Institutional Vs. Retail Data Providers and How They are Disrupting the Blockchain Industry
Blockchain has enabled the development of a wide range of new financial applications and opened up previously inaccessible financial markets to the public. However, access to pricing and trading data is essential for this to happen on a wide scale and to allow the creation and next-gen of new web 3.0 dApps.
Unfortunately, till date, obtaining this data has been difficult since it requires combining data from hundreds of exchanges, all in various forms, with little to no historical data. In this article, we will provide a guide to choosing the best data provider.
Data feed providers deliver market players with price and other information, allowing them to determine whether to purchase or sell stocks and commodities. Companies like the New York Stock Exchange and crypto exchanges produce raw market data feeds. For the most part, however, traders and investors prefer to use standardized, third-party market data feeds.
Information on traded assets is essential for the smooth operation of markets and a lack of information equals a lack of liquidity. Traders need to be aware of the market's current state, as well as the pricing of assets and how those prices fluctuate over time. Data feeds are the way by which market players and (dApps) receive this information.
Due to the large number of objects they track and the frequency with which they are updated, market data feeds transmit enormous volumes of data. Processing large amounts of raw data requires networks and computers that can process many gigabits per second. Many institutional and individual traders rely on standardized feeds from data suppliers instead due to the high cost and complexity. Additionally, these feeds let traders get the information they need while reducing their data processing and network requirements.
Below are DeFi’s institutional and retail data providers:
They are one of the most important sources of financial crypto data. Their platform collects trade and order book data from hundreds of different exchanges, both central and decentralized. Kaiko normalizes the data, stores it, and makes it available to institutional investors, regulators, exchanges, market makers, and startups via APIs. They serve as a single point of contact for market information on financial digital assets data.
Their mission is based on the idea that high-quality data promotes market efficiency, which in turn promotes institutional adoption of crypto assets. Trade and order book data feeds are now the most comprehensive and granular in the industry, used by hundreds of enterprise clients and powering the industry's leading products. They currently provide support to some of the world's largest financial institutions and have collaborated with leading financial platforms such as S&P, Dow Jones, and Algoracle, among others.
Amberdata provides in-depth data and insights into blockchain networks, cryptocurrency markets, and decentralized finance. Amberdata, which was founded in 2017, analyzes over 8 million blockchain network transactions and more than $500 billion in trading activities on a daily basis. The platform provides data to financial institutions for research, trading, risk management, analytics, reporting, and compliance.
It is an important piece of infrastructure for investors looking to enter the asset class and participate in digital asset markets. Institutional customers can easily integrate real-time and historical data and metrics using FIX, REST, WebSockets, and RPC, as well as gain access to reference rates, Indexes, and analytics.
Investors in the institutional and retail markets alike may now get real-time, high-quality, and reliable market and pricing data from CryptoCompare. To help bridge the gap between the crypto asset and traditional financial markets, CryptoCompare provides an unrivaled breadth and scope of data.
To provide a full and holistic view of the market, CryptoCompare aggregates tick data from globally recognized exchanges and smoothly integrates multiple statistics into the cryptocurrency price. CryptoCompare produces a wide range of data at the granular level, including: cryptocurrency trading data, order book data, blockchain, and historical data, social data, reports, and a collection of cryptocurrency indices.
When it comes to data integrity, CryptoCompare upholds the strictest standards, normalizing data from all around the world to maintain consistency and market confidence as a gatekeeper for accurate and clean data.
More than 880,000 members of the CryptoCompare community participate in our forums and reviews, where they discuss and share knowledge about current market trends and peer-reviewed wallets, exchanges, and mining solutions. We offer a wide range of cryptocurrency guides to keep our members up to date on the most important or popular issues, so they can make the best trading decisions possible.
CoinmarketCap is a retail data provider with more than 11,000 cryptocurrencies listed which has a market capitalization of $1.924 trillion. In some circles, it is referred to as the Wikipedia of crypto.
CoinMarketCap was founded in 2013 by Brandon Chez, who was the company's former CEO. Currently, Binance Holdings Limited is the sole owner and operator of the company.
Bobby Ong and TM Lee co-founded CoinGecko in 2014, another retail cryptocurrency data aggregator that tracks price, volume, social, and developer statistics. In order to produce cryptocurrency research, the company collaborated with Western University in Canada and Humboldt University in Berlin. CoinGecko claims to generate $3 million in annual revenue and to monitor over 3,587 tokens from 259 exchanges.
The Pros & Cons of Operating on an Institutional vs. Retail Data Provider
The world of DeFi appears intimidating at first glance. Enterprises must choose and then devote resources to integrating with the appropriate blockchains and smart contract environments. They then face additional challenges interoperating across other blockchains and legacy systems, problems that are likely to worsen as DeFi becomes more multi-chain, with new applications being built across new blockchains seemingly on a daily basis.
The industry is seeing the rise of blockchain middleware – technology that allows enterprise systems to interact with any blockchain. Algoracle, for example, is a decentralized network of oracles, or entities that allow blockchains to communicate with real-world data and off-chain systems.
Conclusion: Which is Better for You- Institutional or Retail?
For the individual with no need for needle-sharp accuracy, retail data providers will get the job done. However, if you’re building a dApp that requires high-level accuracy then Institution data providers are your best bet.
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