[Note] Understand what Wash trading is to avoid being deceived in project evaluation

✍️ What is wash trading?

Wash trading is a market rigging technique in which a person buys and sells assets (such as stocks, cryptocurrencies, commodities) themselves to create trading activity on that asset.

For you to understand and visualize, it is similar to the bots that buy and sell virtual volumes that you often see.

🫵The purpose of #Washtrading is to create large trading volume to attract more interest in the asset or to farm aidrops.

For example: Most projects often airdrop based on transaction volume - the higher the transaction volume, the larger the reward. So a lot of people will Wash trade using wallet1 to sell the NFT at a very high price, then use wallet2 to buy and repeat.

This unintentionally causes project indicators to increase sharply: transaction volume, number of transactions, number of transactions, number of users, active wallet address (active address),... While this is exactly These are commonly used criteria to evaluate the development status of a project.

👉Therefore, in the process of researching and evaluating projects, especially NFT Marketplace projects, you must eliminate volume wash trading (because it is meaningless) to accurately evaluate the project's operating status. , avoid being deceived by the parameters.

As in the photo above, we can see Wash trading at the current #NFTMarketplace . It's easy to see that X2Y2 & LooksRare are the paradise of Wash trading 😃