Ethereum had over US$635 mln in NFT wash trades in April, CryptoSlam reveals

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Over US$635 mil­lion of Ethereum non-fun­gi­ble token sales in April were wash trades, which made up near­ly 60% of all NFT trades on the blockchain for the month, accord­ing to new data from Cryp­toSlam,

The new data also revealed wash trad­ing activ­i­ties on Solana, Binance, Poly­gon, Car­dano, Flow and Arbi­trum, which had been large­ly unknown until now. Accord­ing to Cryp­toSlam, wash trades are trans­ac­tions made with­out the intent to take a gen­uine posi­tion in the market.

Blockchains-by-NFT-sales-volume

Blur marketplace’s point farm­ing is the pri­ma­ry dri­ver of Ethereum NFT wash trades, lead­ing to US$3.4 bil­lion worth of NFT trades being flagged as wash sales so far this year. Blur traders’ bids and list­ings are incen­tivized by the marketplace’s points — the platform’s loy­al­ty sys­tem — fuel­ing some traders’ reliance on bulk wash sales to max­i­mize points, which is sub­se­quent­ly reward­ed in the form of Blur’s util­i­ty token, $BLUR. 

In March, over US$1.1 bil­lion, or 66% of all NFT sales on Ethereum, were wash trades. How­ev­er, the sin­gle high­est wash trad­ing day occurred on Feb. 20, days after the launch of $BLUR. Traders aggres­sive­ly farmed points to earn more $BLUR token rewards, result­ing in over 85% of the day’s sales vol­ume, val­ued at US$295 mil­lion, being flagged as wash trades. 

Wash-trading-transactions
Month­ly sales and wash trans­ac­tions on Ethereum in 2023

Feb­ru­ary, March, and April stand out as high points for wash trad­ing on Ethereum, with a com­bined total val­ue of over US$3.135 bil­lion. At the peak of wash trad­ing on March 4, 2023, dai­ly NFT wash trades trans­ac­tions on Ethereum reached 49,806 com­pared to 2,743 on April 16, 2022, the apex of $LOOKS token farming.

Sim­i­lar to $BLUR token farm­ing in 2023, traders in ear­ly 2022 were farm­ing $LOOKS tokens at the then-new Look­sRare mar­ket­place. CryptoSlam’s data has revealed $LOOKS farm­ing as the dri­ving fac­tor behind US$819 mil­lion in wash sales that took place on Jan. 19, 2022, the most suc­cess­ful day for wash trad­ing ever. Over US$18 bil­lion in wash trades were flagged in Jan­u­ary and Feb­ru­ary 2022. 

Though the val­ue of wash trad­ing sales has decreased since last year, the num­ber of trans­ac­tions has grown near­ly 20x, Cryp­toSlam data shows.

The top two wash-trad­ed col­lec­tions across all blockchains are Ethereum’s Ter­raforms and Meebits, with US$11.5 bil­lion and US$9 bil­lion in flagged trades, respec­tive­ly. Stand­out NFTs from these col­lec­tions include Ter­raforms #4206, which has been wash trad­ed for 86,905.12 ETH (US$242.97 mil­lion), and Meebit #13824 for 29,453.9 ETH (US$99. 4 million).

Meebit and Terraform
Meebit #13824 (left) and Ter­raform #4206 (right).

High­light­ing the extent of traders’ prac­tices, Cryp­toSlam has uncov­ered US$31 bil­lion in all-time wash trade sales vol­ume on Ethereum, total­ing 41% of the blockchain’s US$74 bil­lion in sales. An addi­tion­al US$330 mil­lion in wash trades is reflect­ed across the oth­er top 10 NFT blockchains, mak­ing up a much small­er per­cent­age of their all-time sales. 

NFT sales all time

Wash trad­ing is expect­ed to con­tin­ue and pos­si­bly increase on Ethereum as traders use liq­uid­i­ty-pro­vid­ing tools like Ben­DAO, NFT­fi and Blur’s new Blend lend­ing pro­to­col to pur­sue more plat­form rewards in Blur’s Sea­son 2.

While Ethereum owns the bulk of glob­al wash sales due to $LOOKS and $BLUR token farm­ing, it is expect­ed to con­tin­ue on oth­er chains with a grow­ing num­ber of mar­ket­places adopt­ing reward incentives. 



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