2022 saw a jump in NFT wash trading, according to a report by researcher hildobby_ based on data pulled through DuneAnalytics. Wash trading accounted for 58% of the total NFT trade volumes on Ethereum this year. rosieperper breaks it down
According to theon Dec. 16, wash trading accounted for over half of the total NFT trade volumes on Ethereum in 2022. The tactic peaked in January, with wash trading accounting for over 80% of the total NFT trading volume that month.
The researcher used four filters to weed out odd trading behavior that most likely pointed to wash trading. First, they filtered out obvious trades of NFTs between the same wallet address. Second, they looked at back-and-forth trades of the same NFT between two different wallet addresses – one of the most common wash trading tactics. Third, if a wallet address had purchased the same NFT three or more times, it was flagged as a wash trade because of the unlikeliness of the situation.
To understand how prevalent the practice has become since the NFT markets emerged, when all of the filters were applied, over $30 billion of NFT trading volume from all time could be linked to wash trading. This number is staggering, though it only represents about 1.5% of all trades that have taken place on Ethereum.
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