What Is the Concept of "Wash Trading" and How Does It Affect NFT Valuation? ▴ Learn

What Is the Concept of “Wash Trading” and How Does It Affect NFT Valuation?

Wash trading is a manipulative practice where an investor simultaneously buys and sells an asset to create misleading, artificial activity and volume. In the NFT market, this is done to inflate the perceived value and sales history of a specific NFT or collection.

This artificially high valuation can then deceive lending protocols or buyers, leading to unfair loan terms or overpayment.

What Is the Concept of ‘Wash Trading’ and How Does It Affect Perceived Liquidity?

How Does the SEC Distinguish between an Initial Sale and Secondary Sales under Securities Law?

How Do ‘Wash Trades’ Distort the True Liquidity Picture in Level 2 Crypto Data?

How Can a Protocol Artificially Inflate Its TVL without a Corresponding Increase in Utility?