According to research conducted by blockchain analytics platform Nansen, the NFT (non-fungible token) industry is growing, although there are signs of some less-than-desirable behavior.
The sector “remains plagued by some profit-seeking practices,” Nansen said, noting patterns in transactions that imply token creators may be buying up the floor for particular projects.
That might be a sign of “wash trading,” a technique in which a trader or group of traders buys and sells the same asset to create the perception of increased demand.
“While something looks to be awry, it isn't incriminating proof of wash trading because they aren't being sold directly to each other,” Nansen analyst Ling Young Loon wrote in an email.
“The wallets that they finally sell to may be connected, but it would need a lot more thorough investigation.”
With the advent of blockchain technology, non-fungible tokens, or the NFT industry is growing The new and unconventional NFT industry has witnessed a growth in good activity and attention recently.
They make it possible for owners of digital art, collectibles, and a variety of other objects to keep track of who owns what.
According to data gathered by NonFungible Corp., daily sales reached an all-time high earlier this month.
Despite the likelihood of wash trading, Nansen sees NFT data as generally positive for the industry's growth.
According to the study, “NFTs are a bright new vertical.” The healthy dispersion of NFT minters and the growing number of unique purchasers indicate real, organic growth.”
Ether rocks, a self-admittedly worthless collection of rock pictures (according to its author), just saw one image trade for 45 ETH more than $130k.
Institutions aren't disregarding them either: VISA, the payment behemoth recently acquired a CryptoPunk for more than $160,000 and thinks that NFTs will play a major role in “retail, social media, entertainment, and commerce” in the future.
In June, Twitter opted to offer an NFT collection on Ethereum's "Rarible" marketplace, which included art from Reply Guy, Vitamin T (Vitamin Twitter), Furry Twitter, twttr jggl, Rare Form, Building Characters, and First Born.