The new fashion platform of NFTs is 95% users who sell themselves

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OpenSea is the largest NFT platform, but in recent months LooksRare has been positioning itself as an increasingly strong alternative. However, the latest CryptoSlam report that we know of via Bloomberg, it’s devastating. Approximately 18,000 million dollars, that is, 95% of LooksRare’s turnover are users who sell to themselves with the aim of collecting rewards from the platform itself and artificially increasing the volume of transactions.

This technique is known as ‘Wash trading’ or false volume. The underlying idea is to appear to have a high volume of sales, but in reality it is all because a person is buying and selling himself. It is a fraudulent practice, with which they try to make the sector believe that there is more interest and movement than is real.

The NFT sector needs to clean up

LooksRare started out in January and quickly made a name for itself in the NFT industry. Its rise has been meteoric and it has punctually surpassed OpenSea, the most prominent platform, in transaction volume. Precisely this rapid growth led crypto analysts like DappRadar to suspect.

This maneuver of the false volume is not exactly illegal, since in the field of cryptocurrencies there is no regulation that is clear enough to prohibit it. Selling yourself NFTs is not going to make you money, at least not directly. Since being themselves, they buy them for slightly less value. Where is the benefit then? On the one hand, to appear that there is a lot of movement for the platform to grow and, on the other hand, to generate reward tokens..

It turns out that NFTs can also be stolen: a phishing takes $1.7 million from OpenSea

This technique is still a form of market manipulation. In other financial assets it has its slope that the losses produced in each transaction are rewarded at the time of declaring them. In the case of LooksRare with the NFTs, the compensation occurs in the form of tokens from the platform itself.

In a Chainalysis report described as there sellers who made sales to your same address up to 830 times, although they made very little profit. This is an extreme case, but they do describe up to 262 cases of NFTs being sold to the same wallets more than 25 times. It cannot be said that all these cases are examples of ‘wash trading’, but the high level of repetition indicates that something is happening.

In some cases, these buy-in scalpers did manage to fool other buyers into believing that it was a busy NFT and that its price could go up or down. According to the report, up to 110 merchants achieved positive sales, making some $8.9 million in profit from unsuspecting buyers.

LooksRare is still a much smaller platform than OpenSea, but it is yet another example of how the NFT industry is plagued by speculative maneuvering. Very little directly related to the digital work on which they are based, which should have a much greater role.

In Xataka | A third of NFTs are no longer worth anything. The collapse of sales augurs the beginning of the end of the bubble

OpenSea is the largest NFT platform, but in recent months LooksRare has been positioning itself as an increasingly strong alternative.…

OpenSea is the largest NFT platform, but in recent months LooksRare has been positioning itself as an increasingly strong alternative.…

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