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.
We created an open-source wash trading filter for everyone to use in Dune v2, allowing us to flag $30 billion in NFT wash trades. This corresponds to about 44% of trading volume 🤯
— Hildby >|< (@hildobby_) December 16, 2022
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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*All investment/financial opinions expressed by NFT Plaza are based on the personal research and experience of the site moderators and are intended for educational material only. , the product should be thoroughly investigated.
Tokoni Uti has written extensively on blockchain and cryptocurrencies over the years. Her work has been featured on sites such as BTCmanager and Blockchain Reporter. She has a degree in Corporate Communications.
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