The problem with stock symbols

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Investors are likely to be confused when multiple projects can claim the same ticker without an industry standard for exchanges to assign identifiers.

Could the real USDP rise?

Last month, Paxos, the issuer of the seventh largest stablecoin in the global $ 2 trillion cryptocurrency market, renamed the token, previously known as the Paxos Standard, to the Paxos dollar. As part of the rebranding, the crypto exchange changed the ticker symbol from PAX to USDP.

There was a problem: another stablecoin was already using the ticker.

Unit Protocol, a decentralized lending platform launched in February, had been calling its token USDP since at least July of last year, when it released a white paper. For a hot minute, it looked like the brave team weren’t about to let a bigger rival use the four-letter id without a fight.

“We are currently contesting Paxos’ trademark application for the USDP,” Benjamin Meredith, a representative for Unit Protocol, told CoinDesk on August 27.

To show that the original USDP was a known quantity in the market, Meredith pointed to blockchain data indicating that 138 million units of the token had been minted, each worth just under $ 1. He also shared articles on market data sites CoinGecko and CoinMarketCap as further proof that this stablecoin was an established asset – even though the market cap of Paxos stablecoin was 7.5 times larger.

As of this writing, however, no formal objections have been filed with the United States Patent and Trademark Office. In a subsequent email, Meredith said the unit’s protocol team decided to speak to a Paxos executive first. Still later, he said the call did not take place.

“We’re just going to keep going our little way for now,” Meredith said.

Paxos, for its part, did not appear willing to budge when contacted by CoinDesk. “It is common for projects to share tickers in the cryptocurrency space,” said Paxos spokeswoman Becky McClain. “There are dozens of instances of shared qtickers or tickers that share chain letters, and we believe these uses are distinguishable and coexist without confusion for consumers.” She did not respond to a follow-up question about whether Paxos had checked to see if the TTY machine was already in use before choosing it.

This disappointing story highlights an issue that has happened a few times in the crypto arena and may happen more often in the future as the industry grows. Without a standard for exchanges to assign identifiers, investors are likely to get confused.

“Tickers are designed to make assets instantly recognizable to clients, so it’s important that each ticker refers to a single asset,” said Kevin Beardsley, senior product manager for professional trading at the Kraken Exchange. “However, two projects sometimes claim the same symbol, and the winner is largely decided de facto by the community.”

$ ETH (in Allen)

Unlike a stock, which is typically listed on a single exchange which has the final say over ticker assignments, a crypto asset can be bought and sold on hundreds of sites around the world.

“Whenever two symbolic projects, usually smaller, claim the same ticker, it is often the one [that] is gaining more public momentum and trading lists early on that retains the symbol, ”Beardsley said.

At Coinbase, “we take the recommendation of the issuer into consideration, but we also have an opinion, like all exchanges,” said a spokesperson for the crypto exchange. “In the event of a conflict, we have so far followed a first come, first served model. “

(Coinbase itself has ruffled the feathers this year by choosing the symbol COIN for its Nasdaq listing; Coinsilium, a blockchain investment company, has previously used the identifier of its shares, which trade on the ‘Acquired Exchange based in London.)

Another recent example of the problem was when Ethan Allen, a furniture retailer, changed his stock ticker to ETD from ETH to avoid confusion with ether, the second largest cryptocurrency by market cap.

Surprisingly, a sharp rise in Ethan Allen’s share price earlier this year was attributed to retail traders mistaking the stock for crypto. The furniture chain … um, the CEO of the merchant also said the ticker change would help search traffic, as people who search for information about his business on Google won’t end up browsing stories about the native token of the Ethereum blockchain.

Early crypto advocates saw that standards mattered. In 2014, the then-prime Bitcoin Foundation lobbied the International Organization for Standardization (ISO) to make XBT the original cryptocurrency ticker symbol for foreign exchange.

Why not BTC, which was already the usual abbreviation? “The code XBT was selected because the prefix ‘X’ denotes non-national affiliation or a monetary metal such as gold or silver,” Jon Matonis, one of the foundation’s executives, explained in an editorial. of CoinDesk at the time. “Technically, BTC would be unavailable due to the fact that ‘BT’ already represents the country of Bhutan.”

Matonis predicted that an ISO-compliant ticker would drive adoption around the world. “When a new currency code is adopted by the [ISO], it immediately enters the database tables upon which Visa, MasterCard, PayPal, SWIFT and other clearing networks rely, ”he wrote.

However, ISO never formalized it, and XBT has been used very little to represent the mother of all digital assets. In April, seven years after adopting the so-called ISO ticker, Kraken, one of the few exchanges from those early days to survive and thrive, removed XBT for most purposes in favor of the more familiar BTC.

“Since Bitcoin is decentralized, there is no standard, or governing body, to dictate what rating should be used for this. Nonetheless, “BTC” has been the generally accepted abbreviation for Bitcoin originating in the early days of Bitcoin, ”the company explained.

What BCH?

Perhaps crypto’s most dramatic story concerns Bitcoin Cash, the breakaway blockchain whose creators seceded from the Bitcoin network in 2017 following a prolonged vitriolic debate over how to evolve the system.

“While the Bitcoin and Bitcoin Cash communities claimed the BTC ticker before the hard fork in 2017, the fact that the general public continued to attribute the BTC ticker to the segwit chain ultimately settled the dispute,” Beardsley recalled at Kraken. . (Segregated Witness, or segwit, was the Bitcoin faction’s preferred scaling method.)

Thus, the new cryptocurrency carried the stock symbol BCH.

For existing BTC holders, the chain split was a boon. If your private key controlled, say, 2 BTC before the disputed hard fork, you can then use it to unlock that much on the original channel and gain access to 2 BCH on the new one. Even if you don’t care much about BCH, you can claim it on the new channel, send it to an exchange, and trade it for BTC.

The following year, Bitcoin Cash itself split in two, again due to technical differences between the warring camps. Once again, the result for holders was free money on the new channel.

Exchanges that deposited BCH for clients thus ended up holding two assets where there had been only one. And for a while, they used confusing nomenclature to tell them apart.

The exchanges have tagged one coin BCH ABC or BAB, the other BCH SV or BSV. Eventually, the ABC faction reclaimed the BCH ticker (no suffix) and the nickname Bitcoin Cash, and the other coin became known as BSV (Bitcoin: Satoshi’s Vision).

Last November, the pattern repeated itself. Bitcoin Cash has split in half again. Again, a chain was temporarily called BCH ABC. This time the other was briefly called BCHN (the “n” stood for “node”). It attracted more computer processing power, became the “official” Bitcoin Cash, and the ABC chain was eventually renamed eCash, along with the XEC ticker.

The beauty of blockchains is that they allow strangers on the Internet to agree on things without a boss in charge. But these TV movies show that technology does not solve all coordination problems.

As institutions enter the market, the industry may need to educate them on the specifics of crypto tickers. No portfolio manager wants to have to explain to their board, ‘no, not this BCH – we bought the other’.

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