Wash trading

Wash trading is trading in which the same party is on both the buying and the selling side, making it look as if there is a lot of demand for a token. The volume appears high, while in reality little real trading takes place. Whether this is happening can be suspected from the pattern and tested against the addresses.

What it may indicate

A token that appears to be traded a lot but keeps moving back and forth between the same addresses can be an indication of artificially inflated volume. It can also have an innocent explanation. The signal invites a closer look; it rules nothing out.

A token showed a busy trading picture, but on closer inspection a large part of the transactions ran between a handful of addresses. That can point to wash trading, although it requires the connection between those addresses, not just the volume.

What is wash trading?

Trading where the same party is on both sides, making it look as if there is high demand while little real trading takes place.

How is wash trading identified?

By looking at whether volume keeps moving between the same addresses. The connection between those addresses, not the volume alone, is what points to wash trading.

Waarom zou iemand volume kunstmatig opvoeren?

Hoog ogend volume kan een token actiever en aantrekkelijker laten lijken dan het is. Of dat hier speelt, blijkt pas uit onderzoek van de adressen achter de handel.