Data shows an increase in NFT wash trading by 126% in February 2023
Research has found that the overall NFT wash trading volume has increased continuously for the fourth month on the top six marketplaces in February 2023. An increase of 126.0% is represented by last month’s $0.25 billion in terms of NFT wash trading.
The increase in NFT fictitious trading is the result of a rebound in trading volume, which was a four-month streak of growth that reached $1.89 billion last month. Last month, January, fictitious NFT transactions totaled less than $11.56 billion, representing 5.0% of monthly volume.
3/ However, NFT wash trading is still significantly below the $11.56 billion recorded in January 2022, at just 5% of the monthly volume during the previous NFT bull market.
— CoinGecko (@coingecko) March 20, 2023
Wash trading has been prevalent in some particular marketplaces. For instance, last month, Blur, X2Y2, and LooksRare gave the maximum quantities of NFT wash trading volume at $0.15 billion (27.7%), $0.28 billion (49.7%), and $0.08 billion (15.1%), respectively.
The reason for this could be the activity of users who were motivated to increase trading volume because these NFT markets offered rewards for trading.
In May 2022, X2Y2 started offering trading rewards of X2YX and since then it is one of the NFT fake trading volumes and all fake trades are increasing by 40% per month. In July 2022, X2Y2 had the highest turnover of $0.64 billion.
Before this, Luxrare captured 90% of all NFT wash trades between January and April 2022. Even though LOOKS launched a dollar trading premium at the end of the month, LookRare made $11.33 billion in fake NFT trades in January.
With the advent of the X2Y2 rewards program, the wash deals on LooksRare have changed and contribute in the range of 15-50% of the total market volume.
Blur Marketplace tripled wash deals in February 2023 after the launch of the BLUR$ airdrop.
OpenSea contributed $42.57 million in wash trades, while Magic Eden contributed just $590,000. However, we have not seen any wash trades on CryptoPunks.
In February 2023, fictitious NFT trading accounted for 23.4% of the unadjusted trading volume in the six largest markets. By November 2022, the percentage of fictitious trading volume of the NFT settled around these levels, which shows a significant improvement compared to the reported 67.1%. Early 2022.
Most of X2Y2's and LooksRare's transactions were fictitious, accounting for 85.0% and 80.8% of February 2023 unadjusted trading volume, respectively. The introduction of their trading premium reduced fake trading by 67.6% for X2Y2 and 68.3% for LooksRare thanks to lower token prices.
In other major markets, NFT wash trades are much rarer, accounting for 1.4% of raw volume in Magic Eden, 12.9% in Blur, and 5.8% in OpenSea last month.
Blue is doubling down on token airdrops to boost activity and hasn't seen any impact on NFT wash trades yet. Based on Footprint Analytics data, we calculated the total wash volume for the top six markets.