Solidus Deceived of Crypto Trade Worth $2 bn
Solidus Trade Surveillance has revealed a significant $2 billion in deceptive crypto transactions in the decentralized finance (DeFi) sector. Since September 2020, Ethereum-based DEXs have witnessed a significant volume of wash trading, a form of market manipulation where an entity buys and sells the same asset simultaneously. The report shows that 67% of nearly 30,000 DEX liquidity pools have executed wash trades, accounting for 13% of total trading volumes in DeFi.
Ethereum-based Decentralized Exchanges (DEXs) have seen a volume of around $5.86 billion in the past week, according to DeFiLlama data. Wash trading is a common tool used in smaller and fragmented crypto markets, with exchange and marketplace operators, speculators, and token deployers executing it for various reasons. The Solidus report identified two main types of DEX-based wash trading: A-A wash trading and multi-party wash trading. A-A wash trading involves a single cryptocurrency address acting as both a liquidity provider and swapper.
(With inputs from Shikha Singh)
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