According to Chainalysis, Ethereum smart contracts connected to the NFT marketplace received at least $44.2 billion in cryptocurrency.
Online scamming is not a new phenomenon, but it appears that persistent con artists have discovered a new method. Wash trading, according to recent research by Chainalysis, is a transaction in which the seller is present on both sides of the deal to inflate the value of an item. By simply linking their wallets to the website, users of several non-fungible token (NFT) trading platforms can transact without providing any personal information. Accordingly, a single user may build many wallets and connect them to a platform, Saurav Raaj, creator of tokenization service provider Wize, told FE Blockchain.
According to Chainalysis, Ethereum smart contracts connected to NFT markets and collections received at least $44.2 billion in cryptocurrency last year. The analysis predicts that by 2020, this amount will be $106 million. Since blockchain contacts are anonymous, Raaj continued, “Wash trading is prohibited in the majority of traditional markets in the United States, but it is hard to monitor in the crypto world.
According to industry observers, effective wash traders execute several NFT trades on various platforms. Given the high gas rates and the fact that every transaction is recorded on the Ethereum blockchain, it is clear that the washing trade is bad.
There are signs that an NFT has been wash traded, according to industry experts, include a substantial difference between the floor and list price of an NFT in a collection. According to Shubham Gupta, co-founder and chief product officer of STAN, “Scammers on Discord, Telegram, or any other social media acting as official project members promise people early access, discounts.”
