Detecting wash trading for nonfungible tokens

Sven Serneels

Finance Research Letters, 2023, vol. 52, issue C

Abstract: Nonfungible tokens have recently developed into a new financial market segment notorious for wash trading activity. Wash trades are made when users swap tokens between two or more of their own wallet addresses, most often to boost asset prices and volumes artificially, or to harvest marketplace rewards. The presence of wash trades can entirely distort the apparent fair value of tokens in a collection. They should therefore be detected and excluded from further financial assessments such as token valuations and appraisals. This letter introduces three novel strategies to flag transactions for suspicious wash activity, tailored to the NFT markets.

Keywords: Non-fungible tokens; Wash trading; Analytics; Detection (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322005517

DOI: 10.1016/j.frl.2022.103374

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