Decline in Wash Trading Volumes on Ethereum-based NFT Marketplaces Marks New Low Since May 2022
Crypto News – The latest data from The Block Pro‘s Data Dashboard reveals a significant decrease in wash trading volumes on Ethereum-based NFT marketplaces, marking the lowest levels since May 2022. As of January 9 and January 13, wash trading volumes plummeted to a mere 1.8%, a stark contrast to the 36.2% recorded on January 1, 2023.
This recent percentage is notably the lowest since the 0.35% observed on May 1, 2022. These figures represent the proportion of total USD volume associated with wash trading. Wash trading, a manipulative market practice, involves traders artificially inflating the price or liquidity of assets by trading them amongst themselves.
Efforts to Curb Wash Trading in the NFT Sphere
Notably, prominent NFT platforms such as LooksRare, X2Y2, and Blur, which previously contributed significantly to wash trading activities, have implemented measures to discourage such practices. Rebecca Stevens, Senior Research Analyst at The Block, comments on the evolving landscape: “We’ve observed platforms like LooksRare and X2Y2 scaling back their trading rewards programs.
Concurrently, Blur has been proactive in weeding out wash traders from their airdrop campaigns. These steps, combined with the declining valuations of several NFT marketplace tokens, have contributed to the ongoing decrease in wash trading activities.”
This shift indicates a growing emphasis on transparency and ethical trading practices within the Ethereum-based NFT marketplaces, reflecting a maturation of the industry and a response to previous criticisms regarding market manipulation.
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