Nov 14, 2022
NFT Round-tripping trade
NFT trade history on the blockchain is transparent and auditable. But, it is not so often verified by analytics even so the data is open.
I have analyzed the fraud NFT trades by network analyzing. In fact, some cryptopunks may be round-tripping traded.
What is round-tripping trade?
Round-tripping trade is fraud trade to pretend the higher value item by trading each other. For example, a party(Alice, Bob, Carol) trades an item in each other. First, Alice sells an item to Bob 1 dollar, Alice’s revenue is 1 dollar. Secondly Bob sells the item to Carol 2 dollar, Bob’s revenue is 2 dollar. Third, Carol sells the item to Alice 3 dollar and Carol’s revenue is 3 dollar. Fourth, Alice sells the item to Bob 4 dollar Alice’s revenue is 1 + 4 dollar, even so the item with no added value.
This is round-tripping which is often used by fraud accounting.
NFT round-tripping trade.
Usually the round-tripping trade is used to pretend revenue. The NFT round-tripping trade is usually used to pretend higher value item.
For example, Daniel who don’t know the round-tripping trade of the Alice’s party sees the last 5 dollar trade. He may think “Ah, this NFT is traded at the 5 dollar last, so this should be valued 5 dollar NFT.” It is the pretender method of the NFT value.
Some Cryptopunks may be round-tripping traded.
I analyazed the cryptopunks trades. Some cryptopunks are suspicious of round-tripping. The below image is cryptopunks #2976’s trade history.
The cryptopunk may be round-tripping traded. The below image shows the cryptopunk is sold with 38ETH -> 50ETH -> 58ETH -> 91ETH and finally sold with 100ETH. If the addresses appearing in transactions between 38 and 91 ETH belong to the same owner, this trade is round-tripping.
I developed the NFT analysis application which is enabled to find round-tripping trade. The application name is nftscan. The URL is https://www.nftscanapp.com/.
The trade on blockchain is assured transparency. Please try it and send me feelings.
