NFT market place platforms are exciting places for NFT enthusiasts and judging from the volume that are taking place within these platforms, one can almost be certain that there is money to be made. But wait a minute, why is it that for some platforms that are relatively new, the volume is relatively high although they have not really established themselves compared to the older one ?
What is a wash sale ?
If you look carefully at the activities surrounding these phenomenon increase in volume, you can see users selling tokens to themselves to help earn rewards in the form of more coins. To lure more NFT enthusiasts in this NFT boom, more features centered around incentive programmes are built to reward active users of the platform. These can sometimes referred to as wash sales. It is an market ruse that creates a misleading marketplace. This practice sees an investor buying and selling assets to and from themselves; this makes a product appear more valuable than it is.
Trust in the NFT ecosystem
The transactions are in an murky area in cryptocurrency when it comes to regulation. These sales are actually done to win new tokens rather than to pump up NFT prices to entice non savvy buyers. The marketplace will benefit from the fees generated by each transaction. If this practice undermines trust in the NFT ecosystem, should you be part of game that would ultimately affect those unsuspecting individuals ?
