Description of work

In this dashboard, we want to analyze NFT activities on different chains.

This dashboard includes the following sections:

• a - Definitions and methodology

  • What is an NFT?

  • Analyzed chains

  • What Is NFT Wash Trading?

    \

1. Overall comparison of NFT activities on different chains.

   • 1 - 1 Comparison of the NFT sales volume on different chains.

   • 2 - 1 Comparison of the average sales price per NFT on different chains.

   • 3 - 1 Comparison of the number of sales on different chains.

   • 4 - 1 Comparison of the number of NFTs sold on different chains.

   • 5 - 1 Comparison of the number of buyers on different chains.

   • 6 - 1 Comparison of the number of NFTs sold per buyer on different chains.

   • 7 - 1 Comparison of the number of sales per buyer on different chains.

   • 8 -1 Comparison of the average sales volume per buyer on different chains.

   • 9 - 1 Comparison of the number of new buyers on different chains.

     \

2. Deeper analysis of NFT activities in each chain.

   \

3. A closer look at NFT wash trading on Ethereum

   \

4. Conclusion

a - Definitions and methodology

What's an NFT?

NFTs are tokens that we can use to represent ownership of unique items. They let us tokenize things like art, collectibles, even real estate. Ownership of an asset is secured by the blockchain – no one can modify the record of ownership or copy/paste a new NFT into existence.

NFT stands for non-fungible token. Non-fungible is an economic term that you could use to describe things like your furniture, a song file, or your computer. These things are not interchangeable for other items because they have unique properties.

Fungible items, on the other hand, can be exchanged because their value defines them rather than their unique properties. For example, ETH or dollars are fungible because 1 ETH / $1 USD is exchangeable for another 1 ETH / $1 USD.

Source: ethereum.org

Analyzed chains

Algorand

• To find NFT sales data on Algorand, we use data from [algorand.nft.ez_nft_sales]and [algorand.nft.ez_nft_sales_fifa]tables.

Flow

• To find NFT sales data on Flow, we use data from [flow.core.ez_nft_sales]table.

Solana

• To find NFT sales data on Solana, we use data from [solana.core.fact_nft_sales ]table; also, to find the collection name related to traded NFTs, we use data from [solana.core.dim_labels] table.

Near

• Unlike other reviewed blockchains, in Flipsidecrypto's data related to Near blockchain, there is no separate table for recording NFT sales information; instead, to find NFT sales data on Near, we use data from [near.core.fact_receipts].
  • The query for finding NFT sales on Near is from Ebrahim Yousefi

Ethereum

• To find NFT sales data on Ethereum, we use data from [ethereum.core.ez_nft_sales].

  While reading dashboards about NFT sales on Ethereum, I came across the NFT Wash Trading on Ethereum dashboard written by pinehearst.

  By studying that dashboard and comparing the total volume of NFT sales on Ethereum with the amount listed in reliable platforms such as dAppradar, I figured out that a significant percentage of NFT sales on Ethereum is related to NFT wash trading transactions.

The total volume of NFT sales on Ethereum without considering NFT wash trading transactions is approximately 68.5 billion dollars. Still, the total volume of NFT sales on Ethereum, excluding NFT wash trading transactions, is about 39 billion dollars.

What Is NFT Wash Trading?

Wash trading is when the buyer and seller in a transaction are the same person or two people colluding. It's banned in conventional financial markets because it misleads the rest of the market about the true level of demand, distorts prices and entices others to trade on fake information.

This activity has been illegal in many traditional markets in the U.S. since the passage of the Commodity Exchange Act (CEA) of 1936.

However, the practice still occurs in unregulated crypto markets, and in particular with NFTs. According to Chainalysis, “Wash trading involving NFTs has yet to be the subject of an enforcement action.”

Source: coindesk.com

Different types of NFT wash trading

Point-of-sales washing (POS washing)

• A sells B an NFT for n1 ETH
• B sells A back the same NFT for n2 ETH
  • And the cycle can repeat

Where the price of n1 doesn’t necessarily equal n2. This means that the same NFT essential has been through the same two users.

Either way, the volume (n1+n2) generated from the sales of the NFT should both be counted as washing.

Self-Funding washing (Self-financed)

• A transfers B with funds (ETH/WETH), and A sells B NFT
• The same process repeats with B transferring ETH and NFT back to A

Essentially, the sales volume generated by A and B on the day where transfers of ETH and sales of NFT occur can be counted as wash trading (highly likely that these 2 accounts are linked)

Transfer washing

• When A sells an NFT to B → B transfers the NFT back to A → A sells B the same NFT → repeat.
• This is similar to self-funding wash.

Limitation

One limitation of this approach is that multi-account transfers and washing A→ B → C… D → B → A may not be identified.

All the explanations about the types of NFT wash trading and the methods related to finding NFT wash trading transactions are taken from the NFT Wash Trading on Ethereum dashboard written by pinehearst.

• To find NFT wash trading transactions, only data from [ethereum.core.ez_nft_sales] table was used.

• After looking at transactions related to NFT washing in Ethereum, we decided to add another chain to reviewed chains, called "Ethereum (NFT wash trades removed)".
• In Ethereum (NFT wash trades removed), all NFT wash trades have been removed, giving us a more precise view of NFT activities on Ethereum.

1 - Overall comparison of NFT activities on different chains.

• In section 1, you can compare chains together using the “Select_Blockchains_To_Compare“ drop-down list on the top of the dashboard and you can change the time span of results and charts using the “Timespan“ drop-down list.
• Also, you can change the time frame of charts using the “Time_frame_of_the_charts“ drop-down list.
• All queries in this dashboard are set to run every 24 hours

Phrases written in the "Select_Blockchains_To_Compare" drop-down list may confuse you.

• The "All Chains and Ethereum" option compares Ethereum, Algorand, Flow, Solana, and Near together.
• The "All Chains and Ethereum (NFT wash trades removed)" option compares Ethereum (NFT wash trades removed), Algorand, Flow, Solana, and Near together.
• The second option ==provides a more accurate comparison.

The calculations related to finding NFT wash trading transactions are very time-consuming because to find these types of transactions, the Join operation must be performed several times. Therefore, when you change the parameters, it usually takes a long time to see the results on the charts.

all calculations related to Ethereum, the transaction with TX_HASH 0x92488a00dfa0746c300c66a716e6cc11ba9c0f9d40d8c58e792cc7fcebf432d0 is ignored.

In this fake transaction, a CryptoPunk (Punk 9998) was sealed on 2021-10-28 for $532.414M(124,457.07 ETH).

Later it turned out that the address of the wallets of the buyer and the seller belonged to the same person. You can read the link below for more information on this sale.

• Half-Billion Dollar ‘Fake’ NFT Sale

1 - 1 Comparison of the NFT sales volume on different chains.

2 - 1 Comparison of the average sales price($) per NFT on different chains.

3 - 1 Comparison of the number of sales on different chains.

4 - 1 Comparison of the number of NFTs sold on different chains.

6 - 1 Comparison of the number of NFTs sold per buyer on different chains.

5 - 1 Comparison of the number of buyers on different chains.

7 - 1 Comparison of the number of sales per buyer on different chains.

8 -1 Comparison of the average sales volume per buyer on different chains.

9 - 1 Comparison of the number of new buyers on different chains.

2 - Deeper analysis of NFT activities in each chain

In section 2, you can view a deeper analysis of each chain using the “Select_a_blockchain_for_deeper_analysis“ drop-down list on the top of the dashboard and you can change the time span of results and charts using the “Timespan“ drop-down list.

1 - 2 Correlation between NFT sales volume and other metrics on selected chain and selected time span

3 - 2 Analyzing NFT activities per marketplace on selected chain and selected time span

4 - 2 Top NFT collections

5 - 2 Top 10 most expensive NFTs sold on selected chain and selected timespan.

3 - A closer look at NFT wash trading on Ethereum

Conclusion

In this dashboard, we analyzed NFT activities on five different blockchains, and the following results were obtained:

• Last 30 days observations:

  • The highest volume of NFT sales belongs to Ethereum($484M).

    • After Ethereum, Solana($111.2M), Flow($9.13M), Algorand($900.59K), and Near($126.45K) have the most significant volume of NFT sales.

    • In the last days of November, the share of Ethereum from NFT sales volume decreased, while the share of Solana from NFT sales volume increased.

      \

  • Solana and Ethereum have a much higher NFT sales volume than other blockchains. (Ethereum and Solana own approximately 97% of the NFT sales volume.)

    \

  • The average sales price per NFT for Ethereum is much higher than the other blockchains (514$).

    • After Ethereum, Solana(211.9$), Near(34.65$), Algorand(26.8$), and Flow(23.07$) have the highest average sales price per NFT.

      \

  • The highest number of buyers belongs to Ethereum(190.9K buyers).

    • After Ethereum, Solana(147.67K buyers), Flow(26.01K buyers), Algorand(3612 buyers), and Near(1356 buyers) have the highest number of buyers.

    • In the last days of November, the share of Ethereum from the number of buyers decreased, while the share of Solana from the number of buyers increased.

      \

  • Ethereum and Solana have the highest share in NFT activities among reviewed chains.

• About 43% of the total NFT sales volume on Ethereum is related to NFT wash trading(about $30B).

  • Although the number of transactions related to NFT wash trading is very small, a very large amount of Ether is moved in these transactions.

• The highest volume of NFT wash trading is related to looksrare marketplace (about $25.8B).

2 - 2 The growth of the number of buyers on the selected blockchain