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Ethereum surpassed US$635M in NFT wash trades in April, CryptoSlam reports

Ethereum surpassed US$635M in NFT wash trades in April, CryptoSlam reports

Approximately 60% of all Ethereum non-fungible token (NFT) trades on the blockchain in April were washed, according to newly released data from CryptoSlam. This amounts to over US$635 million.

The new information also shed light on previously hidden wash trade transactions on Solana, Binance, Polygon, Cardano, Flow, and Arbitrum. According to CryptoSlam, “wash trades” are those that occur when there is no genuine intent to enter the market.

Ethereum surpassed US$635M in NFT wash trades in April, CryptoSlam reports

Highest point of Ethereum wash trade

Due mostly to point farming on the Blur marketplace, NFT deals totaling US$3.4 billion have been reported as wash sales thus far in 2018. Some Blur traders resort to large-scale wash sales in order to accrue as many points as possible, which may subsequently be exchanged for $BLUR, the platform’s utility currency, through the marketplace’s loyalty system.

In March, wash trades accounted for over 66% of all NFT sales on Ethereum, or about $1.1 billion. A day with the largest wash trade volume occurred on February 20, just a few days after $BLUR’s launch. Because of traders actively farming points to enhance their $BLUR token payouts, over 85% of the day’s sales volume, worth US$295 million, was marked as wash deals.

Ethereum surpassed US$635M in NFT wash trades in April, CryptoSlam reports

Wash trade on Ethereum reached its highest point in February, March, and April, with a total value of about US$3.135 billion. There were 49,806 daily NFT wash trade transactions on Ethereum during the peak of wash trading on March 4, 2023, compared to 2,743 during the peak of $LOOKS token farming on April 16, 2022.

Terraforms, Meebits: top two wash-traded collections

Traders in the new LooksRare market were farming $LOKS tokens in early 2022, just like they did with $BLUR tokens in 2023. According to information compiled by CryptoSlam, $LOOKS farming was largely responsible for the record-breaking US$819 million in wash sales that took place on January 19, 2022. The value of recorded wash deals in January and February 2022 was approximately US$18 billion.

CryptoSlam data shows that the volume of wash trade sales has increased but the value has decreased during the past 12 months.

Terraforms and Meebits on Ethereum are the top two wash-traded collections across all blockchains, with $11.5 billion and $9 billion in flagged trades, respectively. Two very valuable NFTs in these sets are Terraforms #4206 (wash traded for 86,905.12 ETH; US$242.97 million) and Meebit #13824 (wash traded for 29,453.9 ETH; US$99.4 million).

According to research done by CryptoSlam, 41% of the entire US$74 billion in sales for the blockchain were washed trades on Ethereum. This finding sheds light on the scale of dealers’ activity. The additional US$330 million in wash deals for the other top 10 NFT blockchains is a much smaller percentage of their combined revenues.

It is expected that wash trading on Ethereum will continue, and may even increase, as traders employ liquidity-providing tools like BenDAO, NFTfi, and Blur’s new Blend lending protocol to pursue additional platform incentives in Season 2 of Blur.

Although $LOOKS and $BLUR token farming on Ethereum accounts for the vast majority of global wash sales at present, it is expected that this trend will continue on other chains as more marketplaces incorporate incentive structures.

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About MahKa

MahKa loves exploring the decentralized world. She writes about NFTs, the metaverse, Web3 and similar topics.

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