Despite the increase in wash trades in the non-fungible token (NFT) market, analysis reveals the layer-1 blockchain Solana to be less impacted when compared with other popular blockchains.
Wash trading is an illicit means of market manipulation where a single trader or group of traders buy and sell the same asset, creating the false impression that the asset’s performance in the market is healthy. In the case of NFTs, wash traders involve in malicious trading of tokens that gives the idea that the NFT project(s) has a good performance.
Solana NFT Ecosystem Holds 1.6% Wash Trades
According to the NFT aggregator platform CryptoSlam, the Solana NFT ecosystem records only 1.77% of wash trades in the past 30 days. Over $1.17 million has been spent on wash trades within the Solana network. Of over 886,000 transactions that occurred over the same timeframe, only 11,000 are wash trades.
On the other hand, just like the Ethereum network hosts the highest number of NFT projects, it also holds the highest number of wash trades. Research revealed in December that the Ethereum blockchain housed around 45% of scam trades, representing over $30 billion. The study also showed that wash trades accounted for 80% of transactions held in the NFT ecosystem last year alone.
According to the latest analysis, Ethereum’s record of wash trades amounts to 60.2%, worth $673 million. Next in the hierarchy is the layer-2 Polygon network, which holds 44% of scam NFT trades, representing $22.5 million.
The Bitcoin network is not left behind. Since Ordinal inscriptions entered the blockchain, several NFT projects have harnessed the Bitcoin mainnet to host their digital collections. In the past month alone, the network has recorded over 34% in wash NFT trades, amounting to $56.8 million.
Solana Briefly Exceeds Ethereum in NFT Sales
Meanwhile, last week’s analysis showed that Solana briefly surpassed the Ethereum network in NFT daily trade volume by over $1 million. A few days later, Ethereum regained its leading position.
Still, Solana’s NFT ecosystem performance is commendable, as the blockchain is just recovering from a hurdle that challenged its NFT community.
Following the crash of FTX in November 2022, several top NFT projects migrated to other blockchains, reducing dependence on Solana. Although this affected its ecosystem for some time, the network appears to have recovered.
