OpenSea is the largest NFT platform, but in recent months LookRare has been positioning itself as an alternative with its growing strength. However, the latest CryptoSlam report we know via Bloomberg is devastating. About $18,000 million, so, 95% of LookRare’s turnover is users who sell to them in order to collect rewards from the platform itself and artificially increase the trading volume.

This technique Known as the ‘wash trade’ or wrong volume. The basic idea is that the sales volume appears high, but in reality it is because the person is buying and selling himself. It is a fraud practice where they try to convince the industry that there is more interest and movement than there is.

NFT sector needs to be cleaned

LookRare started in January and quickly made a name for itself in the NFT industry. Its rise has been rapid, outpacing OpenSea, the leading platform by trading volume, just in time. It is precisely this rapid growth that has made specialized crypto analysts like DappRadar suspicious.

This maneuver of fake volume is not exactly illegal, as there are no clear regulations in the cryptocurrencies space to prohibit it. Selling NFT yourself will not make any money, at least not directly. Because they are themselves, they buy them for slightly less value. Then where is the benefit? On the one hand there seems to be a lot of action for the platform to grow and on the other hand creating reward tokens..

This technique is still a form of market manipulation. In other financial assets, losses produced on each transaction tend to be rewarded as soon as they are declared. In the case of LookRare with NFTs, compensation takes place in the form of tokens from the platform itself.

In a Chainalysis report, how to describe there Sellers selling to your same address up to 830 times, despite making very little profit. This is an extreme case, but they describe 262 cases of NFTs that were sold to the same wallets more than 25 times. Not all of these cases are examples of ‘wash trades’, but a high level of repetition suggests something is going on.

In some cases, these buy-in scalpers have managed to convince other buyers that it is a heavy NFT and that its price may rise or fall. According to the report, as many as 110 sellers made positive sales, Making a profit of approximately $8.9 million from unsuspecting buyers.

LookRare is still a much smaller platform than OpenSea, but it’s another example of how the NFT industry is grappling with speculative maneuvers. It has little to do with the digital work on which they are based, which should have a much larger role.

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