The Global Crypto Classification Standard (GCCS)
Developed by 21Shares and CoinGecko
We are pleased to release the Global Crypto Classification Standard (GCCS) jointly developed by 21Shares and CoinGecko, which serves as an industry taxonomy and uniformed way to categorize cryptoassets.
Crypto, with its unfamiliar technology stack and sheer number and variety of projects and tokens, terminology and jargon, may be daunting and overwhelming to industry newcomers. The GCCS provides a clear framework to classify various projects and cryptoassets within the space, so that users and investors can easily identify what a project does, and where they sit as part of the larger crypto stack.
By having a clear classification standard, we envision that this can help users in two ways:
Firstly, understanding where certain projects sit within the crypto stack and what function and/or features their tokens may have, helps users identify specific tradeoffs and risks associated with certain design choices. For example, a decentralized exchange (DEX) could be built both as a decentralized application (dApp) on a smart contract platform, or as an application-specific blockchain. The DEX could have governance tokens that serve to govern the protocol, while also issuing a staked currency, which may be a key component of their liquidity.
Secondly, having a uniform classification standard allows users to compare relative metrices across similar projects. Referencing the same DEX example, users may evaluate the relative price, market capitalization, or even fully diluted valuation (FDV) of the two governance tokens to arrive at investment decisions.
While numerous changes may occur over the years to fine-tune the classification, including modifying or making new additions as the crypto industry evolves, we hope this classification standard will help act as a guide for users of all levels to have a better grasp of the crypto industry, and the myriad projects and tokens which exist in this space.
GCCS Introduction and Methodology
Unlike traditional financial assets, crypto varies drastically from one asset to another. In order to solve this, we have introduced three levels of categorization, with each crypto asset falling into one option within each level.
At the protocol level:
- Level 1: The Crypto Stack
- Level 2A: Market Mapping by Sectors
- Level 2B: Market Mapping by Industries
At the token level:
- Level 3: Taxonomy of Cryptoassets
Level 1: The Crypto Stack
Similar to how each software application exists as part of a traditional technology stack, each crypto project or protocol exists on a specific layer in the crypto stack. ‘Level 1: The Crypto Stack’ specifically refers to the various layers that encompass crypto’s infrastructure.
Examples include cryptocurrencies, smart contract platforms, and decentralized applications (dApps). These definitions describe the nature of the project and/or protocol, and where it sits as part of the broader crypto stack. We refer to only networks or protocols for Level 1 and Level 2 (subsequently covered), instead of the underlying cryptoassets (tokens), which are described in Level 3.
Level 2: Market Mapping by (a) Sectors, and (b) Industries
The second level of categorization classifies protocols by sectors and industries as introduced by S&P in 1999 and used by the global financial community. “Sector” describes a large segment of the crypto-economy, while “industry” refers to a more specific group of companies or businesses (protocols or networks). For example centralized finance and decentralized finance sectors are analogous to the traditional financial sector, while the entertainment and leisure sector is similar to traditional consumer discretionary.
In cases where projects fit into multiple sectors or industries, we match them to the most relevant category.
Level 3: Taxonomy of Cryptoassets
Each crypto project and/or protocol may have one or more tokens – as such, at Level 3, we’ve proposed a Taxonomy of Cryptoassets to classify them according to the asset ‘superclass’ to which they belong.
This is analogous to traditional markets, where a publicly listed company may issue different capital market instruments such as equities or bonds to serve different purposes. For instance, MakerDAO is a dApp (Level 1) that fits in the ‘Credit / Lending’ industry under the ‘Decentralized Finance’ sector (Level 2). MakerDAO has a two-token model consisting of MKR, a governance token, and DAI, an anchored stablecoin. Based on the different functions they serve as part of the MakerDAO protocol, MKR can be effectively considered as a “capital asset”, while DAI is meant to act as a “store of value” asset.
Level 3: Taxonomy of Cryptoassets:
Read More: The Global Crypto Classification Standard
In order to demonstrate the practical application of the classification standard, classifications to the Top 100 coins by market cap (as at time of writing) has been included in the report. The full classification of these coins, as well as further details regarding the standard, can be found in the presentation below:
If you have an account on CoinGecko, browse and download the GCCS here. Not yet a CoinGecko user? Create an account now.
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This report has been prepared and issued by 21Shares AG and Gecko Labs Pte. Ltd. for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable. However, we do not guarantee the accuracy or completeness of this report. Crypto asset trading involves a high degree of risk. The crypto asset market is new to many and unproven and may have the potential to not grow as expected.
21Shares AG and Gecko Labs Pte. Ltd. reserves the right to make changes to the report at any time without prior notice. If any changes are made, the updated report will be posted on this website.
There is currently relatively little use of crypto assets in the retail and commercial marketplace compared to relatively large use by speculators, thus contributing to price volatility that could adversely affect an investment in crypto assets. In order to participate in the trading of crypto assets, you should be capable of evaluating the merits and risks of the investment and be able to bear the economic risk of losing your entire investment. Nothing in this report does or should be considered as an offer by 21Shares AG or Gecko Labs Pte. Ltd. and/or its affiliates to sell or solicitation by 21Shares AG or its parent or Gecko Labs Pte. Ltd. of any offer to buy bitcoin or other crypto assets or derivatives. This report is provided for information and research purposes only and should not be construed or presented as an offer or solicitation for any investment. The information provided does not constitute a prospectus or any offering and does not contain or constitute an offer to sell or solicit an offer to invest in any jurisdiction.
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