8 min read

A Study on NFT Wash Trading

Published on
Apr 11, 2023
This article is for general information purposes only and isn’t intended to be financial advice.
Phoenix Baker
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A study by Coingecko has revealed that NFT wash trading is becoming increasingly prevalent in some NFT marketplaces. Let us go into the details and understand how it affects the NFT marketplaces, valuations and traders.

What is NFT Wash Trading?

NFT wash trading refers to the practice of repeatedly buying and selling the same NFT(s) to manipulate trading volume and/or prices. 

This can be done by individuals or groups and can have various intentions, including misleading other buyers and sellers, tax loss harvesting, and farming for tokens from incentive programs. Wash trading is illegal in traditional capital markets, but it is rampant in NFT and even broader crypto markets due to the lack of strict regulations.

What is the Volume of Wash Trading on NFT Marketplaces?


According to the Coingecko study, the total NFT wash trading volume on the top six marketplaces rose for the fourth consecutive month in February 2023, reaching $0.58 billion, a 126.0% increase from the previous month. 

The uptrend in NFT wash trading follows the recovery in NFT marketplace trading volume, which also marked four straight months of growth to reach $1.89 billion last month. However, NFT wash trading remains significantly below the $11.56 billion recorded in January 2022, at just 5.0% of the monthly volume during the previous NFT bull market.

Which NFT Marketplace has the Most Wash Trading Volume?

Wash trading has become prevalent on certain NFT marketplaces. The Coingecko study found that X2Y2, Blur, and LooksRare contributed the largest amounts to NFT wash trading volume in February 2023, accounting for 49.7%, 27.7%, and 15.1%, respectively. 

X2Y2 first started offering $X2Y2 trading rewards in May 2022, and since then, X2Y2 has had one of the highest NFT wash trading volumes, accounting for over 40% of total wash trading each month. Prior to that, LooksRare had accounted for over 90% of NFT wash trading from January to April 2022.

How Common is NFT Wash Trading?

As of February 2023, NFT wash trading made up 23.4% of unadjusted trading volume across the six biggest marketplaces combined. The percentage share of NFT wash trading volume has stabilized around these levels since November 2022, and it is a big improvement from the 67.1% share recorded at the beginning of last year. However, most transactions on X2Y2 and LooksRare are still wash trades, which represented 85.0% and 80.8% of unadjusted trading volumes on the respective marketplaces in February 2023.


The lack of strict regulations in NFT and broader crypto markets makes it easier for wash trading to occur, but the increased awareness and transparency brought about by studies such as the Coingecko report can help mitigate this practice.

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