The global crypto market cap is $ with a 24-hour volume of $. The price of Bitcoin is $16,559.16 and BTC market dominance is %. The price of Ethereum is $1,195.47 and ETH market dominance is %. The best performing cryptoasset sector is Jobs, which gained 12%.
The Right Place to Buy, Earn, Exchange and Borrow against Your Crypto.
Traders seeking to artificially inflate the price of collections or earn marketplace trading rewards generated $389 million in wash trades during October.
Cover art/illustration via CryptoSlate
Global NFT sales in October clocked in at more than $850 million over roughly 3 million total transactions. I looked into NFT wash trades last month and that research got me to look at the numbers more closely.
The trigger points for me to say that transactions are becoming more fake are as follows:
To look into this further, I spoke with two centralized exchanges that operate NFT marketplaces. The exchanges said that around 80% of new buyers are keeping NFTs in their wallets, rather than selling them. With the market so unfavorable, holding these assets seems to be the sensible move.
So where are all these unique buyers and sellers coming from? I had a word with Footprint Analytics and brought up my points. I realized that the statistics I am looking at are way too big. It involved multiple chains and it is hard to track everything. We agreed to work on only Ethereum-based marketplaces as an example to dive deep into since it is the most popular.
Here are the findings:
According to Footprint Analytics’ filters, wash trading makes up nearly half of all NFT trading volume.
Footprint Analytics – ETH NFT Market Overview (With Wash Trading Filtered)
Traders seeking to artificially inflate the price of collections or earn marketplace trading rewards generated $389 million in wash trades out of October’s total of $758 million in NFT trading volume — bringing the amount of wash trading in the NFT market close to half that of organic trading. The number of wash trading users accounts for nearly 46% of total users.
Wash trading is a form of market manipulation where an investor simultaneously sells and buys the same financial instruments to create misleading, artificial activity in the marketplace. It creates enormous dissonance in the NFT industry between what most people imagine NFT trading is i.e., someone buying an NFT for speculation, and the behavior which actually underlies the market — hundreds of insiders transferring NFTs between their own wallets.
There are several indicators to identify suspicious trading activity.
Signals and indicators include:
The incentives for wash trading are to earn platform rewards and to create an appearance of value or liquidity for assets. Because there is no way to prevent or discourage wash trading in the NFT market today, people have a hugely misguided picture of the amount of organic, genuine trading activity in the industry.
For example, 81% percent of all trades on X2Y2, one of the top 3 NFT marketplaces, were wash trades according to the filters applied. The main reason for X2Y2 wash trading is volume-based daily trading rewards. The larger the percentage of volume a user contributes to X2Y2, the larger the share of daily trading rewards the user will earn. A similar breakdown can be observed when looking at individual collections. For example, of Dreadfulz’ $1.1 billion in total volume, $1.131 billion was flagged as wash trading.
An analyst or writer who does not understand this wash trading dynamic risks grossly misunderstanding the current market. For example, here’s what Business2Community wrote on Oct. 12 about Terraforms by Mathcastles:
“Non-fungible token collections continue showing strong resilience amid the current general crypto market downturn so far this year. Here are some of the top-selling NFT collections this week: 1. Terraforms Reclaim The Top Spot. Terraforms, a non-fungible token (NFT) collection from Mathcastles, has reclaimed the top spot after flipping below our ten top-selling lists last week. Terraforms has a 24-hour sales volume of 1,814 ETH.”
The next collections the article listed were BAYC and CryptoPunks, which have nearly no wash trading. This would give a reader the impression that Terraforms more of a popular collection than those blue chip collections when in reality there were almost no organic trades.
By filtering trades for wash trading, traders, analysts and investors can more accurately evaluate NFT assets and the industry. Having accurate datasets and using them are two separate things. My role here is not to whistleblow or break the NFT myths, I am here to share my knowledge and tell my side of the story to everyone.
Using this article, I would like to make a request to analyze CEX NFT marketplaces’ data. Binance or Bybit NFT Marketplace would be ideal.
This is a guest post brought to you by Anndy Lian.
Directly from this Widget: the top CEXs + DEXs aggregated through Orion. No account, global access.
Anndy Lian is a business strategist with over 15 years of experience in Asia. Anndy has worked in various industries for local, international, and publicly traded companies. His recent foray into the blockchain scene has seen him manage some of Asia’s most prominent blockchain firms. He believes that blockchain will transform traditional finance. He is currently Chairman of BigONE Exchange and Chief Digital Advisor at the Mongolian Productivity Organisation.
Become a member of CryptoSlate Edge and access our exclusive Discord community, more exclusive content and analysis.
Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.
Crypto custodian, BitGo, has been selected by John Ray III, acting CEO at FTX to safeguard FTX’s assets amid bankruptcy proceedings.
The Cardano community is left wondering what happened as Ardana and Orbis end project development.
Are those who see any silver lining in the FTX collapse overly optimistic, or are they actually thinking long-term?
Bitcoin and Ethereum make up 91% of Bitfinex reserves, U.S. Senators want FTX executives to be held accountable for the FTX crash, and much more in this edition of CryptoSlate Wrapped Daily.
Amid waning user trust in exchanges in the wake of the FTX collapse, Buterin discusses how CEXs can cryptographically prove solvency.
Difficulty is expected to adjust down as hashrate slows suggesting a possible top is in
Struggling institutional crypto platform Genesis may be causing parent company DCG a billion-dollar problem that it cannot solve possibly linked to 3AC
Spotlighted investment vehicle Grayscale holds roughly $10B worth of Bitcoin after failure to produce proof of reserves.
Kraken Exchange CSO, Nick Percoco, just announced via a tweet reply that the hackers identity has been discovered
SBF loss over $15B in one day according to data reviewed from the Bloomberg Terminal
Coinglass data shows that FTX’s BTC balance is now negative at -197.95 BTC after over 20K BTC left the exchange in the past 24hrs
Their liabilities are evaluated as a part of an audit and are included in the proof-of-reserves.
Chief from Axie.GG sees the future of blockchain gaming in esports, and expects Axie Infinity to lose leadership but remain a part of the ecosystem.
Got a story tip? Email [email protected]
Disclaimer: By using this website, you agree to our Terms and Conditions and Privacy Policy. CryptoSlate has no affiliation or relationship with any coin, business, project or event unless explicitly stated otherwise. CryptoSlate is only an informational website that provides news about coins, blockchain companies, blockchain products and blockchain events. None of the information you read on CryptoSlate should be taken as investment advice. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own diligence before making any investment decisions. CryptoSlate is not accountable, directly or indirectly, for any damage or loss incurred, alleged or otherwise, in connection to the use or reliance of any content you read on the site.
© 2022 CryptoSlate. All rights reserved. Terms | Privacy
Please add “[email protected]“ to your email whitelist.
Stay connected via
