Surging Cases of NFT Wash Trading Undermine Growth of the Nascent Industry

The Intelligent Insurer #53: Chainalysis reports creators are selling themselves their NFTs to drive up prices

Insured Finance software development updates

We remain firm in our aim of pushing the development of our next-generation digital asset insurance platform to the next level in 2022. As part of our work towards the launch of our mainnet, we have made a few upgrades to the platform to boost user experience and set the ground for our mainnet release.

  • The withdrawal button will now be disabled if the withdrawal amount is zero.
  • We are currently reworking the token bridge experience for users to enable seamless transactions.
  • We have fixed the broken link to claim monitoring documentation.

NFT wash traders made over $8.9 million in profit

With the meteoric rise of NFT creation and trading, blockchain analysis firm Chainalysis discovered a massive amount of wash trading being carried out on the NFT market. Wash trading is a form of market manipulation where a trader sells and buys the same asset to create artificial and misleading activity in the marketplace.

OpenSea rival LooksRare under intense scrutiny for facilitating wash trades

January 2022 saw the position of OpenSea as the largest NFT marketplace based on trading volume threatened by the launch of a new decentralized NFT trading platform LooksRare. The platform used aggressive tactics to divert OpenSea users to the new platform and boost its engagement. For the past few weeks, LooksRare has recorded monster trading figures, drawing the attention of analysts.

Rising wash trading reports undermine NFT industry credibility

NFT projects and platforms can no longer provide reliable statistics regarding their performance since wash trades create false volumes. Investors lose their trust in market volume stats and lose their money to low-value NFTs sold at exorbitant prices. Due to misleading statistics, NFT collectors become unable to make informed trading decisions.

About Insured Finance

Insured Finance is a decentralized, peer-to-peer insurance marketplace. Users can request customized insurance on a wide variety of digital assets, thereby ensuring full protection. Those fulfilling requests can earn premiums and earn a competitive return on their capital. Claims are fully collateralized and settled instantly.

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A decentralized P2P insurance marketplace with easy claims and instant payouts. Powered by Polkadot.

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Insured Finance

A decentralized P2P insurance marketplace with easy claims and instant payouts. Powered by Polkadot.