Why Is Volume-Weighting Often Used in Calculating a Crypto Settlement Index?

Volume-weighting is used to give greater importance to the prices from exchanges with higher trading activity and liquidity. This approach ensures that the settlement price is more representative of the market consensus, as large, liquid exchanges are generally harder to manipulate.

A price spike on a low-volume exchange will have a minimal impact on the final index price, thereby increasing the index's robustness and resistance to manipulation.