Wash Trading Volumes on Ethereum NFT Marketplaces Hit Lowest Point Since May 2022
According to The Block Pro’s Data Dashboard, wash trading volumes on Ethereum-based NFT marketplaces have reached the lowest levels since May 2022. On January 9 and January 13, NFT wash trading volumes hit a low of 1.8%, compared to 36.2% on January 1, 2023. This decline in wash trading is significant as it indicates a decrease in market manipulation where individuals artificially drive up prices or create the appearance of liquidity by trading assets amongst themselves.
Steps Taken to Combat Wash Trading
Several NFT platforms that were previously associated with high levels of wash trading, including LooksRare, X2Y2, and Blur, have made changes to discourage such activities. LooksRare and X2Y2 have phased out some of their trading rewards programs, while Blur has implemented filters to exclude wash traders from their airdrop. Additionally, the devaluation of various NFT marketplace tokens has contributed to the decline in overall wash trading.
Hot Take: Decline in Wash Trading Signals a More Transparent NFT Market
The decreasing levels of wash trading volumes on Ethereum-based NFT marketplaces indicate a positive shift towards a more transparent and trustworthy market. The efforts taken by platforms like LooksRare, X2Y2, and Blur to discourage wash trading have contributed to this decline. By phasing out trading rewards programs and implementing filters, these platforms are actively working towards eliminating market manipulation. Additionally, the devaluation of NFT marketplace tokens has further deterred wash traders. As wash trading continues to decline, investors and collectors can have increased confidence in the authenticity and value of NFTs, leading to a healthier and more sustainable market ecosystem.
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