CryptoSlam: Blur Has At least $577 Million In Wash Trade
- Data tracking firm CryptoSlam says at least $577 million worth of wash trades related to Blur’s airdrop on Feb.
- The recent spike in NFT trading volume overtaking the largest NFT trading platform, Opensea, is attributed to manufactured reasons.
- The above figures can easily confuse investors that the NFT market is active again, so a new set of wash trade detection tools has been deployed.
CryptoSlam has discovered at least $577 million of over $1 billion worth of Blur-related wash trade revenue since the February 14 airdrop, such as a brief resale of NFTs at a price close to the asset’s original transaction, according to Forkast reports.
Scott Hawkins, Data Engineer at NFT data tracking firm CryptoSlam, says wash trades are detected when they engage in suspicious behavior, such as reselling NFTs for a short time at a price close to the transaction initial of the property.
Wash trading is a transaction in which a seller sells an asset and then repurchases it later or at the same time as the sale. This type of trading can be used as a form of market manipulation, and an investor rapidly buys and sells the same asset to influence price or trading activity.
This behavior suggests that some Blur users sold NFT to themselves using different wallets to receive Blur tokens (BLUR) and accumulate points for airdrops.
“There is no restricting mechanism from Blur to prevent this. It appears that there is no disincentive to farm points for airdrops, aside from the rising Ethereum gas fees, because of no royalties paid or marketplace fee. We are finding that this is artificially propping up sales volume in a very disingenuous way for the entire NFT market,”Hawkins shares.
Because of this, the community has judged that Blur has facilitated wash trading during their airdrops to attract users from other platforms.
Due to a spike in NFT sales volume that was in part seen as artificial by CryptoSlam, Blur recently surpassed the sales volume of rival OpenSea, the most significant player in the industry. Since wash trades also lift global sales volume to the highest level since January 2022, it will create a false sense of the resurgent NFT market that misleads investors.
“All of this is a by-product of [Blur’s] war with OpenSea. This token scheme has artificially distorted real activity in NFTs,”Hawkins said.
For these same reasons, 13.6k wallet addresses canceled their OpenSea orders in the past week due to Blur’s loyalty program, which is almost 5-6 times the average historical history, according to data from Dune Analysis.
Reportedly, last year Cryptoslam also conducted similar surveys of the NFT platform Look Rare when it artificially inflated the market by adding $8 billion in wash trades to global NFT volume .
Hawkins added that CryptoSlam has been monitoring the anomaly for the past week and has spent the past few days updating the wash trade detection algorithm that has been applied retroactively. The data aggregator says its latest update could prevent future wash trades from reflecting in global figures. CryptoSlam’s algorithms will also flag suspicious individual wash trades and wallet activities.
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