At least $577 million of Blur-linked NFT sales are wash trades, says CryptoSlam

CryptoSlam has discovered at least US$577 million worth of laundered non-fungible tokens (NFTs) related to the upcoming marketplace, Blur.io, since the platform began airdropping its initial tokens to users on Valentine’s Day, February 14. .

According to Scott Hawkins, a data engineer at NFT data tracker CryptoSlam, the detected wash trades exhibited suspicious behavior, such as NFT reselling within a short period at prices close to the assets’ initial transactions.

The behavior suggests that some Blur users have sold NFTs to themselves using different wallets to acquire Blur tokens (BLUR) and collect points for airdrops.

“There is no limiting mechanism from Blur to prevent this – in fact, it appears that due to no royalties paid, no marketplace fee, there is no obstacle to operating farm points for airdrops, except for the increasing Ethereum gas fees. What we find is that this artificially increases sales volume in a very disingenuous way for the entire NFT market, says Hawkins.

Traders have until April to obtain listing and bidding points on Blur, which keeps track of the top competitors through its airdrop points chart. They then receive BLUR via airdrop, which can also be sold on centralized and decentralized cryptocurrency exchanges.

Due to the increase in NFT sales volume that has been partly flagged by CryptoSlam as artificial, Blur recently overtook rival OpenSea’s sales volume, which has been the largest in the industry. The wash trades also lifted global selling volume to the highest level since January 2022, creating a false sense of a resurgent NFT market.

Blur did not immediately respond Discardits request for comment.

“All of this is a byproduct of [Blur’s] war with OpenSea. This token scheme has artificially distorted real activity in NFTs,” Hawkins said.

Hawkins added that CryptoSlam has been monitoring the anomaly for the past week and has spent the past few days updating its laundering detection algorithm that has been applied retroactively. The data aggregator said the latest update could prevent future laundry trades from being reflected in global metrics. CryptoSlam’s algorithms will also flag individual laundry trades and activities of suspicious wallets.

“CryptoSlam took similar action in 2022 when LooksRare farming also artificially inflated the markets by adding $8 billion in wash trades to global NFT volume. Wash trades were removed to protect NFT investors and provide the industry with much needed clarity and confidence in the data reported on CryptoSlam, said Yehudah Petscher, NFT strategist at CryptoSlam.

See related article: Wash trade in NFT marketplace LooksRare may inflate prices: analysts