🥏 Blur NFT marketplace has finally gone live with its native $BLUR token. Dropping its latest tantalizing offering amid a wave of controversy and dubious decision making.

On February 14 saw the token arrive alongside the last installation of Blur airdrops, a mechanism that aimed to draw regular NFT traders to the platform. The NFT marketplace has managed to become the main competitor to OpenSea despite only launching last October. Part of its growth has been fueled by its promise to reward loyal users of its platform in the form of airdrops and tokens.The promise was made at launch, with the airdrops scheduled in three phases, each bigger than the previous one. The first airdrop, dubbed “Care Package,” sought to reward users who traded NFTs on competing marketplaces for six months before Blur opened shop.

The second airdrop sought to reward users who listed an NFT on its marketplace throughout November 2022. The reward was 10x what was on offer for the first airdrop, and the third, which took place on February 14, was the biggest. In total, over 360 million $BLUR tokens were awarded to traders that placed bids on Blur with Care Packages containing BLUR tokens.

◾️What is Wash Trading?

Wash trading refers to an activity where one or more traders have schemed to create an artificial demand for security by purchasing and selling it multiple times. This results in traders and investors paying more for a security than it is worth. In NFTs, this fraudulent activity affects both the price and volume of an NFT project, resulting in marketplaces no longer having reliable metrics for determining the growth and reach of their platforms.

◾️The Case of Blur

The anticipation of the final installment of the Blur airdrop significantly fueled trading on Blur. At times, the self-proclaimed “marketplace for pro traders” topped OpenSea with regards to NFT trading volume. This is despite having fewer active traders and transactions than OpenSea, which has raised some eyebrows.

➡️Traders Engage in Wash Trading to Take Advantage of the Airdrop By Blur ⬅️

Some have suspected “wash trading,” in which traders on the platform manipulate trades to boost their potential rewards. This suspicion is confirmed by data from Dune Analytics that suggests 13% of Blur trades were based on wash trading, compared to only 2% from OpenSea.

Now that the final airdrop has taken place, several top traders that have benefited from the airdrops appear to be the result of wash trading. For example, the top trader won 3.2 million BLUR tokens, currently valued at around $1.9 million. The second earned 2.97 million BLUR, or $1.8 million, and the third earned 2.5 million BLUR, or $1.5 million.

It’s not clear who owns the Ethereum wallet that took home the top prize; however, it’s a relatively new address created only three months ago. A little digging reveals that the owner has been very active the past few days, trading huge sums of Mutant Ape Yacht Club and Otherside NFTs. Interestingly, this user has been buying and selling many of the same NFTs over and over again in a bid to boost his trading volumes. The wallet also engaged in many trades, with the second and third-place wallets signifying individuals that were in cahoots to manipulate volumes.

Trading data from the wallet indicates the owner has been buying and selling large quantities of the same NFTs repeatedly, which may be indicative of wash trading or at least a concerted attempt to rig the Blur trading mechanism. The asset prices aren’t high enough to arouse suspicion, but the number of trades is over the roof.

Looking at the wallets of the second-and third-highest claimants reveals interesting patterns of contact with the top wallet, such as batch sales of different NFTs conducted back and forth through Blur.

That again suggests either coordinated trading by a single person or group across numerous wallets or wash trading by the same person or group. It’s not immediately evident who controls these wallets, either, like the top wallet, but they’re all connected in what seems like a massive and successful effort to influence the Blur airdrop, which has boosted the marketplace trading volume for Blur.

Interestingly, a look at the wallets of the second-highest claimant (2.97M BLUR, or $1.8 million) and third-highest claimant (2.5M BLUR, or $1.5 million) show numerous interactions with the top wallet, including back-and-forth batch sales of various NFTs via Blur.

Again, it points to either wash trading from one person or group across multiple wallets, or a coordinated effort. As with the top wallet, it’s not immediately clear who owns these wallets—but they’re all intertwined in what appears to be a large-scale and successful attempt to manipulate the Blur airdrop, surely driving up Blur’s marketplace trading volume in the process.

Other top claimants in the Blur airdrop include well-known collectors and social media personalities, including the pseudonymous Machi Big Brother (almost 1.85 million BLUR, or $1.1 million worth), Keungz (610K BLUR, or $368,000 worth), and major Bored Ape Yacht Club trader Franklin (540K BLUR, or $326,000 worth).

◾️What is Wash Trade Index?

BitsCrunch’s wash trade index represents the level of wash trading prevalent in a selected blockchain, marketplace, or collection, providing more precise insights into the overall trading activity. The index is calculated by determining the percentage of wash-traded volume over the non-wash-traded volume. This index will be either blockchain-specific, marketplace-specific, or collection specific. The index value can range from 1 to 100, with 1 being the lowest wash trade activity level to 100 being the highest presence of wash trading activity in a collection, blockchain, or marketplace.

bitsCrunch aims to make this wash trade index the most reliable metric in the NFT ecosystem, which offers critical insights into NFT trading/flipping.

◾️How to read the index value

Index Score Definition

⭕️1 to 5 Low wash trading activity

⭕️5 to 10 Moderate wash trading activity

⭕️10 to 20 High wash trading activity

⭕️20 to 35 Very high wash trading activity

⭕️35 to 55 Dangerous level of wash trading activity

⭕️55 to 100 Stay away from trading activities as wash trading is very high

◾️ Blockchain wash trade index

This index represents the level of wash trading prevalent in a specific blockchain. It is calculated by determining the percentage of wash trade volume over the non-wash trade volume.

◾️Marketplace wash trade index

This index represents the level of wash trade in the selected marketplace. It is calculated by looking at the percentage of wash trade volume over the non-wash trade volume.

◾️Data points required to calculate the index

To calculate the NFT index, we gather data from the blockchain by analyzing all NFT transactions. To obtain the data points we look at daily trends and historical data. By analyzing the daily trends in NFT transactions, we get a deeper understanding of the current market conditions. Whereas, we look at extended historic data to avoid any potential manipulation of the index by any party. By analysing the historical data, we can identify more accurate trends and avoid the effects of wash trade transactions, which can be difficult to detect in just one transaction.

◾️Volume

To have a comprehensive view of the NFT market, we consider both the total NFT sales volume and the total wash traded volume. This includes an analysis of both daily and historical data.

◾️Traders

We also track the number of wash traders by analyzing both the daily count of wash traders and the historical count, as traders are often the initiators of wash trading.

◾️NFT transactions

Transactions play a crucial role in our platform. Ergo, we pay close attention to daily and historical transaction trends and wash traded transactions.

◾️Conclusion

BitsCrunch‘s Wash Trade Index provides accurate insights and reports on wash trading activities in NFT markets, allowing traders to identify fraudulent behaviour by analysing daily and historical trends across collections, blockchains, and marketplaces. We calculate the index based on multiple data points, providing a reliable indicator of trading behaviour.

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