Dealing in blockchain-based assets requires that you be vigilant for signs of market manipulation. According to Hildobby’s research using Dune Analytics data and stats wizard Hildobby’s research, nearly half of all NFT sales volume on Ethereum blockchain was due to wash trading.
I created an open-source filter for wash trading on Dune v2 that flagged $30B worth of NFT trades. That’s approximately 44% of volume traded .
< (@hildobby_) December 16, 2022
The Mysterious Ethereum Wash Trades
The term “span style=”font weight: 400 Wash trading” refers to an arrangement in which the buyer and seller of an NFT collaborate to manipulate the market. This allows the parties involved to increase the trading volume of a specific NFT or collection. This is a concern in the NFT market because many buyers base their purchases on existing trading volumes.
The report stated that well-intentioned incentives to encourage usage quickly became a way to win the race to attract the highest volume of customers and be the most successful market.
According to the report, this is a serious problem for the Ethereum network. 58% of the Ethereum network’s NFT trading for 2022 was wash trading. 80% of January trading was wash trading. This dubious sales strategy accounts for nearly 45% of all NFT trades on the network since records started. It was also noted that wash trades are often done at large amounts which makes them overrepresented in these statistics.
The latest statistics show that wash trading is not widespread. Markets such as LooksRare or X2Y2 are particularly popular for these types of activities. This is mainly due to the incentives offered to users to encourage trading.
Want more? Get more information from NFT Plazas
Subscribe to the Weekly Newsletter
Join our Discord
Follow us on Twitter
Follow us on Facebook
Follow us on Instagram
*All opinions regarding investment and financial matters expressed by NFT Plazas come from the research and experience of site moderators. They are meant to be educational and not for profit. Before making any type of investment, individuals are responsible for fully researching any product.
NFT Plazas’s first article, Ethereum NFT Sales Stats Are Tarnished By Wash Trading appeared on NFT Plazas.
Did you miss our previous article…