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.
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.
Why would anyone inflate volume artificially?
Volume that looks high can make a token appear more active and more attractive than it is. Whether that applies here only emerges from examining the addresses behind the trading.
Which data do you need to recognise wash trading?
The trade history of the pair, the addresses behind the orders, and the times at which they acted. The pattern becomes visible when the same parties keep appearing on both sides. A single repeated trade is not enough.
How does Paucitas approach wash trading?
We cluster the addresses that act together and set the reported volume against the actual flow of funds. What can be established is described; what stays uncertain is named as such. The result is an investigation report. The first step is a conversation with Paucitas.
See also
Your own situation
If you are reading this, you probably have a question about your own situation. That is exactly what Paucitas does.
The first step is contact by phone. We prefer to schedule that call through WhatsApp, so you do not have to wait. In the call we look together at what can factually be established in your case and what Paucitas can examine for you.