The meteoric rise of Non-Fungible Tokens (NFTs) has created a digital revolution that has transformed the art, gaming, and collectibles industries. But as with any gold rush, there are those who seek to exploit it for personal gain. One such practice, NFT wash trading, has emerged as a concern for investors and artists alike. This blog post will explore the concept, its techniques and how to avoid NFT wash trading.
Definition of NFT Wash Trading
NFT wash trading refers to the practice of buying and selling NFTs in a coordinated manner with the intention of creating fake trading volume and price movements. This is done to create a false impression of market activity, attract new buyers, and inflate prices.
Purpose of NFT Wash Trading
The purpose of NFT wash trading is to manipulate the market by creating a false sense of demand for an NFT. This can be done to increase the perceived value of an NFT, attract new buyers, or manipulate the market in a way that benefits the wash trader.
Overview of the NFT Market
The NFT market is a relatively new and rapidly evolving industry, with an estimated market size of over $2 billion. The market consists of various platforms where NFTs can be bought and sold, such as…