More than $30 billion in NFT trading volume on Ethereum is wash trading


  • Over half of the impressive ‘total trade volume’.
  • 58% of trade volume was in the category of wash trading.
  • Most NFT traders are not benefiting from increased gas prices.

The NFT market is still plagued by wash trading, a kind of market manipulation when the buyer and seller of a trade collude or are the same. However, new research on blockchain data analytics shows the seriousness of the situation.

According to Dune Analytics, dodgy deals accounted for more than half of total NFT transaction volumes in 2022 and approximately 45% of total NFT volume.

Trading in wash skyrocketed in January, accounting for more than 80% of overall NFT trading activity.

The analytical framework applied four filters to eliminate unusual speculative trading that most probably indicated wash trading.

First, they prohibited large NFT trades between wallet addresses. Second, they looked at one of the most common washing techniques: transactions of the same NFT between two different wallet accounts. 

Third, given the peculiar circumstances, a wallet address was recorded as having made a wash transaction if it purchased the same NFT three or more times. Last but not least, if the purchaser and seller in an NFT deal had wallets initially financed by the same account, it was clear that there was a relationship between them, and the trade was classified as a wash sale.

After applying all the filters, more than $30 billion in total NFT trading activity could be connected to wash trading. Yet this figure represents only around 1.5% of total Ethereum trades.

According to the statistics, the NFT marketplaces LooksRare and X2Y2, which both offer coin rewards for network involvement, had the most excellent rates of wash trading, at 98% and 87% of the overall amount, respectively.