Crypto Long & Short: The Trouble With Ticker Symbols
Would the real USDP please stand up?
Last month, Paxos, the issuer of the seventh-largest stablecoin in the $2 trillion global cryptocurrency market, renamed the token, previously called 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 one hitch: Another stablecoin was already using the ticker.
You’re reading Crypto Long & Short, our weekly newsletter featuring insights, news and analysis for the professional investor. Sign up here to get it in your inbox every Sunday.
Unit Protocol, a decentralized lending platform that went live in February, had been calling its token USDP since at least July of last year, when it published a white paper. For a hot minute it seemed the plucky team was not about to let a bigger rival use the four-letter identifier without a fight.
“We are currently disputing Paxos’ trademark application for USDP,” Benjamin Meredith, a representative for Unit Protocol, told CoinDesk on Aug. 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 writeups on the market data sites CoinGecko and CoinMarketCap as further evidence this stablecoin was an established asset – even if the Paxos stablecoin’s market cap was 7.5 times larger.
As of this writing, however, no formal objection was filed with the U.S. Patent and Trademark Office. In a later email, Meredith said the Unit Protocol team decided to first talk to a Paxos executive. Still later, he said the call didn’t happen.
“We’re just going to go along our merry way for the time being,” Meredith said.
Paxos, for its part, seemed unwilling to budge when contacted by CoinDesk. “It’s common for projects to share tickers in the cryptocurrency space,” said Paxos spokesperson Becky McClain. “There are dozens of instances of shared qtickers or tickers that share letter strings, and we feel confident these uses are distinguishable and coexist without confusion for consumers.” She did not answer a follow-up question about whether Paxos checked if the ticker was already in use before choosing it.
This anticlimactic tale highlights an issue that has come up a handful of times in crypto and may do so more often in the future as the industry grows. Without a standard for exchanges to assign identifiers, investors are apt to get confused.
“Tickers are designed to make assets instantly recognizable to clients, so it’s important each ticker refers to a single asset,” said Kevin Beardsley, lead product manager for pro trading at the Kraken exchange. “However, two projects sometimes claim the same symbol, and the winner is mostly decided de facto by the community.”
Unlike a stock, which is usually listed on a single exchange that has final say over ticker assignments, a crypto asset can be bought and sold on hundreds of venues throughout the world.
“Whenever two, usually smaller, token projects claim the same ticker, it’s often the one [that] gains more public momentum and exchange listings early on that retains the symbol,” Beardsley said.
At Coinbase, “we take the issuer’s recommendation under advisement, but we have an opinion, too, as do all exchanges,” said a spokesperson for the crypto exchange powerhouse. “In case of conflicts, we’ve so far followed a first come, first serve model.”
(Coinbase itself ruffled feathers this year by choosing the ticker COIN for its watershed Nasdaq stock listing; Coinsilium, a blockchain investment firm, already used the identifier for its shares, which trade on the London-based Acquis Exchange.)
Another recent example of the problem was when Ethan Allen, a furniture retailer, changed its stock ticker to ETD from ETH to avoid confusion with ether, the second-largest cryptocurrency by market capitalization.
Amazingly, a big run-up in Ethan Allen’s share price earlier this year had been attributed to retail traders mistaking the stock for the crypto. The furniture chain’s … ahem, the merchant’s CEO also said the ticker change would help with search traffic because people googling news about his company won’t end up wading through stories about the native token of the Ethereum blockchain.
Early crypto advocates saw that standards mattered. In 2014, the Bitcoin Foundation, then in its heyday, lobbied the International Organization for Standardization (ISO) to make XBT the original cryptocurrency’s ticker symbol for foreign exchange.
Why not BTC, which even then was already the customary abbreviation? “The code XBT was selected because the prefix ‘X’ denotes a non-national affiliation or a monetary metal such as gold or silver,” explained Jon Matonis, one of the foundation’s leaders, in a CoinDesk op-ed at the time. “Technically, BTC would be unavailable due to the fact ‘BT’ already represents the country of Bhutan.”
Matonis predicted that an ISO-standard ticker would spur worldwide adoption. “When a new currency code becomes adopted by the [ISO], it immediately enters the database tables upon which Visa, MasterCard, PayPal, SWIFT and other clearing networks rely,” he wrote.
ISO never made it official, however, and XBT was only sparsely used to represent the mother of all digital assets. In April, seven years after adopting the would-be ISO ticker, Kraken, one of the few exchanges from those early days that survived and thrived, scrapped XBT for most purposes in favor of the more familiar BTC.
“Being that Bitcoin is decentralized, there is no standard, nor governing body, to dictate what notation should be used for it. Nonetheless, ‘BTC’ has been the generally accepted abbreviation for Bitcoin stemming from the early days of Bitcoin,” the company explained.
Perhaps the most dramatic ticker story in crypto involves Bitcoin Cash, the breakaway blockchain whose creators seceded from the Bitcoin network in 2017 following a protracted, vitriolic debate over how to scale the system.
“While both the Bitcoin and Bitcoin Cash communities claimed the BTC ticker ahead of the hard fork in 2017, the fact the general public continued ascribing the BTC ticker to the segwit chain ultimately settled the dispute,” Beardsley at Kraken recalled. (Segregated Witness, or segwit, was the scaling method preferred by the Bitcoin faction.)
Thus the new cryptocurrency went by the ticker symbol BCH.
To existing holders of BTC, the chain split was a windfall. If your private key controlled, say, 2 BTC before the contentious hard fork, afterward you could still use it to unlock that much on the original chain and to access 2 BCH on the new one. Even if you didn’t care much for BCH, you could claim it on the new chain, send it to an exchange and swap it for BTC.
The following year, Bitcoin Cash itself split into two, again over technical differences between warring camps. Once again, the upshot for holders was free money on the new chain.
Exchanges that custodied BCH for clients thus found themselves holding two assets where there had been one. And for a time, they used a befuddling nomenclature to tell them apart.
The exchanges labeled one coin BCH ABC or BAB, the other BCH SV or BSV. Eventually, the ABC faction reclaimed the BCH ticker (sans suffix) and the Bitcoin Cash moniker, and the other coin became known as BSV (Bitcoin: Satoshi’s Vision).
Last November, the pattern repeated. Bitcoin Cash again split into two. Again, one 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, with the ticker XEC.
The beauty of blockchains is they let strangers on the internet come to agreement on things without a boss in charge. But these ticker dramas show technology doesn’t solve all coordination problems.
As institutions enter the market, the industry may need to educate them on the idiosyncrasies of crypto tickers. No portfolio manager wants to have to explain to her board, “no, not that BCH – we bought the other one.”