Since the February 14 airdrop, CryptoSlam has identified at least $577 million of the more than $1 billion in Blur-related wash trade proceeds, including a temporary sale of NFTs at a price around the asset's original transaction.
CryptoSlam, wash trades are discovered when they exhibit strange behavior, such as briefly reselling NFTs at a price near to the property's transaction initial.
Wash trading refers to a transaction in which a seller sells an asset then afterwards, or concurrently with the sale, buys it back. A trader who uses this method of trading to manipulate the market quickly buys and sells the same asset in order to affect the price or trading activity.
This activity shows that some Blur users sold NFT to themselves using separate wallets to get Blur tokens (BLUR) and accrue points for airdrops. Hawkins stated:
“There is no restricting mechanism from Blur to prevent this. It appears that there is no disincentive to farm points for airdrops, aside from the rising Ethereum gas fees, because of no royalties paid or marketplace fee. We are finding that this is artificially propping up sales volume in a very disingenuous way for the entire NFT market,”
In order to draw users from other sites, the community has determined that Blur has enabled wash trading during their airdrops.
Blur recently outsold rival OpenSea, the most important player in the market, thanks to an increase in NFT sales volume that CryptoSlam partially viewed as artificial. Wash trades will provide investors a misleading impression of a resurgent NFT market by increasing worldwide sales volume to its greatest level since January 2022. Hawkins stated:
"All of this is a by-product of [Blur’s] war with OpenSea. This token scheme has artificially distorted real activity in NFTs,”
Due to Blur's loyalty program, 13.6k wallet addresses have canceled their OpenSea orders in the last week for the same reasons, which is about 5–6 times the historical average.
Cryptoslam also carried out comparable studies on the NFT platform Look Rare last year when it artificially inflated the market by adding $8 billion in wash trades to the total volume of NFT transactions worldwide.
Hawkins noted that during the course of the previous week, CryptoSlam had been keeping an eye on the anomaly and had recently been working to update the wash trade detection algorithm that had been deployed retroactively. The data aggregator claims that its most recent modification may stop future wash deals from appearing in global statistics. Moreover, suspicious individual wash trades and wallet activities will be indicated by CryptoSlam's algorithms.