NFT Wash Trading on Solana

Exploring Solana NFT Wash Trading

Organic Volume (-Wash)

All Trades (Including Wash)

Wash Trading on Hadeswap

To what extent was wash trading occurring on Hadeswap across time, who were the top washers and what collections were the most frequently washed?

Solana Ecosystem NFT Overview

Let’s take a look at the extent of Wash Volumes on Solana

Solana NFT Markets

Wash Trading has surfaced as an issue on the Ethereum chain. On the Solana Ecosystem, we see a dozen of unique NFT marketplaces appearing late, such as the AMM-like platforms such as Hadeswap in recent months. This dashboard will explore the extent of wash trading on Solana NFT marketplaces

Scope

Solana Ecosystem NFT Overview
Wash Volume by Platform
Hadeswap Deep Dive
Misc: Market Dominance by Swap volume

✨ Key Findings

Wash trading is a recent issue on Solana
Across platforms, Magic Eden (v2) generates the highest amount of wash trading volume on the Solana NFT landscapes but it contributes to a fraction of Magic Eden’s trade volume
Wash trading is rampant and perpetual issue on Hadeswap, contributing to 3%+ of its total volume ever generated
After removing wash volume, Magic Eden still dominates the NFT market in terms of volume currently

Findings: Wash trading constitute a large percent of Hadeswap total sales volume

At the ecosystem level, of all the wash trading volume generated on Solana, Magic Eden contributed over 69% of the total volume. This was followed by Hadeswap at 20%+ and Solanart at 4%+.
While the majority of the wash trading volume originated from Magic Eden, it contributed a smaller proportion of the overall volume.
In contrast, ==wash trading took up a fraction of Hadeswap’s NFT volume (1-5%)== in the last 5 weeks. Additionally, since Hadeswap genesis, there was no week without wash trading taking place.
Across marketplaces, we see that volume contributed by wash trades relative to the total marketplace volume was highest for Hadeswap (2.8+%). In contrast, it only contributed to 1%+ of Magic Eden v2’s total volume.

:large_blue_circle: Findings: Wash trading on Solana is a recent issue

The Weekly SOL volume of NFTs has been steady on Solana over the last few weeks. This was after the major decline after May of this year.
While SOL volumes have been staying steady, we are seeing a gradual rise in the number of NFTs sales transaction, meaning more NFTs are been sold on Solana.
Wash trading is a recent issue on Solana: Wash volumes were mostly absent or low up until August of this year, since then it have been increasing steadily over the weeks.
In the last 2 weeks, over ~10% of all NFT volumes on Solana were attributed to Wash Trades.

Wash Volume by Platform

Wash volume by platforms

Defining Wash Trade

> Wash trades are made when users swap tokens between two or more of their own wallet addresses, most often to boost asset prices and volumes artificially, or to harvest marketplace rewards. - Serneels (2022)

There are a couple of approaches to finding wash trades. In short, if the same NFT gets transacted between the same buyer and seller multiple times, it will be counted as a wash trade. In this analysis, we will find wash trades by filtering out wash trades with the following approach:

If User A sells an NFT to User B and User B lists and sells it: A → B → A → B…. The methodology is elaborated here in my previous analysis.
If user A sells an NFT to User B and transfers the NFT back to the Seller and buys it again: A → B
1. For Solana NFTs, if the mint address (specific NFT) is sold multiple times but there’s only 1 distinct buyer and 1 distinct seller, we can reasonably assume that the particular mint is wash traded

Solana NFT Landscapes

Apply the platform parameters to filter this section by marketplace

Findings: Wash trading on Hadeswap is a perpetual issue since launch.

Trend and Volume

Wash trading constitutes a small fraction of volume on Hadeswap at the time of analysis
Wash trading also occurs on a daily basis on Hadeswap, with 0 days since its launch where no wash trade occurs

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Wash Traders

In terms of Wash traders on Hadeswap, there were 280+ addresses identified, with the top washer swapping 666+ of SOL, trading 1 distinct NFT
Referencing the total volume generated, this washer alone contributed to 10%+ of all wash volume for Hadeswap

Washed Collections

ABC - Abracadabra A collection of 10K immutable NFTs was identified as the most washed collection on Hadeswap - this collection contributed to over half of all wash volumes on Hadeswap

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Comparing Volumes across Marketplaces on Solana

Misc - we make comparisons in market dominance across different platforms.

twitter: pinehearst_ | discord: pinehearst#1947 | date of analysis: 23rd Oct 2022 | Hadeswap Wash Trading

This section shows the comparison in market dominance, volume, NFT sales count, and buyers across platforms. Overall, we still see Magic Eden dominating the Solana NFT marketplace in terms of volume. Hadeswap appears to be the second leading marketplace on Solana, even after accounting for wash trading.

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