Wash trading is a fraudulent practice that involves buying and selling NFTs while simultaneously inflating the price of the NFT to create the illusion that trading volume is significant. These activities artificially inflate trading volumes, making it easier for unscrupulous actors to manipulate market prices. In 2022, wash trading activity surged 25-fold, accounting for more than half of the total $54 billion in NFTs traded on the Ethereum blockchain. This practice undermines confidence in the market because investors may be misled by inflated prices.
AI-based detection for investor protection
AI and ML technologies can detect wash trades in real time, protecting investors from manipulated market prices and helping them make informed investment decisions. BitsCrunch, an AI-powered NFT analytics platform, uses the Wash Trading Index to detect suspicious trading patterns and provide a comprehensive overview of wash trading activity across different blockchains, marketplaces, and NFT collections. This data enables informed decision-making by distinguishing between actual market trends and artificially inflated trading volumes.
Counterfeit NFT response
Counterfeit NFTs are another major challenge facing the NFT market. While famous NFT collections have more options to combat counterfeit NFTs, lesser-known digital artists and creators are at risk. Authenticity, considered a cornerstone of the NFT space, is seriously undermined by fake artwork. This issue dilutes the value of original creations and seriously threatens the integrity and reliability of the entire NFT ecosystem.
Leveraging AI for Authenticity
AI and ML can also help identify fake NFTs by leveraging on-chain analytics to detect suspicious transaction patterns in real-time. BitsCrunch’s fraud detection mechanism helps users detect suspicious trading activity and set up alerts and notifications. This technology supports informed decision-making, allowing users to discern real market trends from artificially inflated trading volumes.
Collaborative NFT Ecosystem
BitsCrunch’s community-driven approach sets it apart from other data tools on the market. A network is not a simple concept. A vibrant ecosystem empowers users and developers through permissionless participation without central approval. This means that anyone can participate and contribute without central approval and community-driven growth.
Powered by BCUT tokens
The platform evolves with its users by regularly adding new features and use cases. The ecosystem is powered by BCUT, BitsCrunch’s native token, which plays an essential role in maintaining network integrity.
AI-based market assurance
By providing market participants with clear insight into the authenticity of trading activity, BitsCrunch contributes to a safer NFT environment that investors can navigate with confidence and trust. AI and ML technologies enhance trust and value in the NFT ecosystem by combating wash trade and counterfeit NFTs through innovative solutions like BitsCrunch. Strengthening a Trusted NFT Ecosystem In conclusion, BitsCrunch’s AI-based tools, powered by a collaborative and community-driven approach, serve the market. We guarantee a trustworthy NFT environment for all participants.