CryptoSlam reveals over $635m in Ethereum NFT wash trades in April

Over $635 million of Ethereum NFT sales in April were wash trades, making up nearly 60% of all NFT trades on the blockchain for the month, according to CryptoSlam. Wash

CryptoSlam reveals over $635m in Ethereum NFT wash trades in April

According to new data from CryptoSlam, 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. Wash trading activities have also been observed on other blockchains such as Solana, Binance, Polygon, Cardano, Flow and Arbitrum. Wash trades are transactions made without the intent to take a genuine position in the market.

The primary driver of Ethereum NFT wash trades is Blur marketplace’s point farming. This has led 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.

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 trade transactions on Ethereum reached 49,806 compared to 2,743 on April 16, 2022, the apex of $LOOKS token farming.

CryptoSlam’s data has revealed $LOOKS farming as the driving factor behind US$819 million in wash sales that took place on Jan. 19th 2022 – the most successful day for wash trading ever. Over US$18 billion in wash trades were flagged in January and February 2022 alone. Though the value of wash trading sales has decreased since last year, the number of transactions has grown nearly 20x.

The top two collections that have been wash traded 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).

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. The practice of wash trading is not limited to Ethereum alone but is expected to continue on other chains with a growing number of marketplaces adopting reward incentives.