Blur’s [BLUR] future turns uncertain as concerns around wash trading surface

• Wash trade volume on Blur equated to 34% of the total volume on the marketplace till date
• Blur’s wash trading tripled last month after it airdropped its native token BLUR

The ghost of wash trading came to haunt the Non-Fungible Token [NFT] market yet again. For the fourth consecutive month in February 2023, the total NFT wash trade volume across different marketplaces increased, as per a report by CoinGecko. The total volume in February jumped 126% to $580 million from the previous month’s volume of $250 million.

How much are 1,10,100 BLURs worth today?

Interestingly, Blur [BLUR], which recently replaced OpenSea as the dominant NFT marketplace in sales volume, accounted for 27% of the total wash trading during February. In comparison, OpenSea accounted for only 5% during the same time period.

The report added that Blur’s wash trading tripled last month after it AirDropped its native token BLUR, which rewards users on trading activity on the platform.

Source: CoinGecko

Blur needs to be clearer!

Wash trading is a form of market manipulation that inflates trade volume and value when investors, individually or in organized groups, simultaneously sell and buy the same assets.

Blur’s loyalty program, like AirDrops, incentivizes trading activity on the platform. As a result, it is possible that some Blur users sold NFTs to themselves while using multiple wallets to buy BLUR and earn points for AirDrops.

Additional data from Dune revealed that the wash trade volume on Blur equated to 34% of the total volume on the marketplace till date.

However, it should be noted that even if the total volume is adjusted for wash trading, Blur will still occupy the lion’s share of the market. While it stood at 74% for unadjusted volume, its share when wash trading transactions were filtered out dropped to 69%.

Source: Dune Analytics

NFT wash trading accounted for 23.4% of the unadjusted trading volume as of February 2023. However, it should be noted that there was a marked improvement from January 2022 when the share of wash trading was around 67%.

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BLUR token faces heat

At the time of writing, BLUR exchanged hands at $0.56, per CoinMarketCap, with a market cap of over $232 million. It lost over 55% of its value in the last 30 days.

Due to concerns surrounding wash trading, native token BLUR’s volume plunged 70% over the last week, data from Santiment revealed. The weighted sentiment, too, travelled along the negative path, suggesting that investors were wary of its prospects.

Source: Santiment