Wash Trading Tarnishes Ethereum NFT Stats


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Those who work with blockchain-based assets are constantly on the lookout for signs of market manipulation. Now, according to research compiled by the Statistics Wizard, hildby,use Dune analysis According to data, almost half of all NFT sales recorded on the Ethereum blockchain are due to wash trading.

Mysteries of Ethereum Wash Trading

“Wash trading” basically refers to a situation where NFT buyers and sellers work together to manipulate the market. Thus, the concerned party can increase the trading volume of certain her NFTs or collections. Naturally, this is a concern in his NFT market, given that many buyers base their purchase decisions on existing trading volume.

“Benevolent schemes quickly emerged to encourage its use as a way to attract this volume and lead the race to become the most successful market,” the report notes.

Based on the numbers in the report, this is a big problem for the Ethereum network, as 58% of NFT transactions in 2022 and 80% in January alone were wash transactions. This dubious sales tactic has accounted for almost 45% of all NFT transactions on the network since records began. However, it has been pointed out that these statistics are overestimated as wash trades are typically traded in large amounts.

The latest statistics show that wash trading is not uniform across the board, as marketplaces such as LooksRare and X2Y2 are particularly active in these activities. Primarily through rewards issued to users as a way to encourage trading.

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Conor the Tech Veteran
He previously spent 6 years publishing research on tech stocks, and believes in using a combination of fundamental, technical, and quantitative analysis. Prior to a career in tech stocks journalism he was a technology and semiconductor analyst with a research team.

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