(Source: bitsCrunch)
Wash trading is a form of market manipulation in which non-fungible tokens (NFT) (or any asset/security for that matter) are sold and bought by the same person. It is an illegal practice banned in traditional financial markets. Wash trading is prevalent in trading including crypto markets for several reasons. One of the major reasons is to artificially inflate the value of assets without risk. This is done to potentially inspire increased legitimate trading.
The buyer and seller send the asset and cash back and forth, but only the initial sale is publicly reported, with the second exchange where the asset and money are returned to their original owners, avoiding any attention. As a result, traders often find themselves getting sucked into these projects and end up losing their hard-earned money.
How to identify wash trading?
With NFTs, an individual might set up multiple crypto wallet addresses to buy and sell an NFT to themself to make it appear as though a digital asset is highly valuable.
Transactions between wallet addresses are stored on a blockchain and can be viewed publicly – meaning, anyone can see when an NFT was traded and how much that NFT sold for. However, wallet addresses contain no identifying information and are presented as a string of alphanumeric characters, making it very difficult to discern who is behind a transaction and if two wallet addresses are owned by the same individual.
Here’s where bitsCrunch (BCUT) comes into play. bitsCrunch is an AI-powered, decentralized NFT data platform which enables developers to build reliable NFT applications (dApps) quickly and easily. BCUT, the native token of bitsCrunch, brings several unique features and benefits to the table, including NFT analytics, data privacy, decentralized data marketplace and community governance.
Unleash NFTs, by bitsCrunch, is the NFT analytics and forensics platform that provides rich NFT data visualization enabling users to:
- Wash trade detection
- Differentiate between the true volume and the fake wash trade volume
- Find fair price for NFT
- NFT market reports
So, if you are looking for a solution to understand the metrics related to wash trading in the NFT space, then you can get started with Unleash NFTs.
If you wish to trade BCUT tokens on an exchange, then you can read this article on how to do it on Giottus Crypto Exchange. If you wish to deposit, then we have that covered as well. Trade responsibly.
Disclaimer: Crypto-asset or VDA investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.
