According to a recent report from CoinGecko, NFT wash trading has continuously increased over the past 4 months, with a total volume of $580 million across top 6 marketplaces: Magic Eden, OpenSea, Blur, X2Y2, CryptoPunks, and LooksRare.
The total NFT trading volume on these 6 marketplaces is 1.89 billion USD, of which wash trading accounts for 23%. X2Y2 takes a half of wash trading volume with 49.7% ($280 million), Blur with 27.7% ($150 million), LooksRare 15.1% ($80 million), OpenSea 5.8% ($42.57 million) and Magic Eden with 1.4% ($590,000).
Wash trading is a type of scam when the buyer and seller in a transaction are the same person or two people colluding. Some people perform wash trades to make it look like they’re active in the marketplace, thereby earning rewards. As report said, a lot of wash trades were made at the time when NFT exchange Blur launched BLUR token and huge airdrops that encourage users to be active on the platform.
In the first week of March, Blur captured 84% of ETH-based NFT transactions but most of them were wash trades because investors rushed to trade in order to earn airdrop points. So, while the rise in NFT wash trading volume may be a sign of the market recovery, it also shows the need to strengthen regulations and security measures to protect investors and prevent fraudulent activities.