NFT wash trade report surfaces amid declining trade volume
NFT markets have shown an exciting set of metrics in 2023 as wash trading and token farming practices emerge amid declining overall trading volumes.
According to a recent DappRadar report, Bored Ape Yacht Club (BAYC) saw a staggering 1095% growth in 7-day trading volume, reaching $21.9 million.
With analysis from CryptoSlate data and Footprint Analytics, this article examines the market dynamics driving these phenomena and provides a comprehensive understanding of where the NFT market may be headed.
Laundry trade and Blur Point farming
A closer analysis of BAYC’s recent increase in trading volume reveals that wash trading contributed significantly to the increased calculations.
DappRadar’s report says that wash trading occurs when traders create artificial volume by trading assets among themselves. This practice has become more common as the Blur marketplace token drop season 2 approaches. As a result, NFT market makers strategically leverage the point collection mechanism to maximize future profits.
In the case of BAYC, only about 30 unique Bored Apes were involved in these laundry trades. However, a significant portion of these sales were attributed to whale wallets, suggesting potential trading activity between their accounts, although further verification is needed.
Additionally, as Blur’s NFT peer-to-peer lending protocol emerges, Bored Apes’ eligibility as collateral will add to their appeal, touching on the intersection of agriculture and security, the DappRadar report noted.
A market for professionals
The NFT market is experiencing a downturn in 2023, with daily trading volumes falling significantly compared to previous peaks. Trading volumes fell across the board while Blur took the lion’s share of the market from OpenSea. This report suggests that NFT royalties are becoming less relevant, leading creators to seek new revenue strategies.
Blue-chip NFT projects have shown resilience during the bear market, but are experiencing falling floor prices. Ethereum’s dominance in the NFT market is also challenged by network congestion and fees, which may drive users to alternatives such as Polygon.
Navigate the volatile NFT market
Footprint Analytics’ April monthly NFT report noted that the NFT market witnessed a 50% drop in trading volume and an oversupply of sellers at the end of the month.
Despite some growth in the number of NFT projects, the decline in funding indicates investors’ caution in putting money into their sector.
As wash trading and token farming practices emerge amid declining trading volumes, the NFT market landscape is becoming increasingly complex. This evolving market requires investors and traders to stay well informed of the latest developments and trends in order to navigate effectively.
Disclaimer: Our authors’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Do your own due diligence before doing anything related to the content of this article. Finally, CryptoSlate takes no responsibility if you lose money trading cryptocurrencies.
