NFEX Founder Sounds the Alarm on Price Manipulation in NFT Market

On March 25th, NFEX founder nfex dragon said on Twitter that a new address 9082D2 (0x90… fba9), which had been created for only six days, quickly ranked fifth on the Blur scoreboard due to price manipulation. Market manipulators similar to the 9082D2 usually bid 30-80 NFTs, and their bids will increase sharply over a short period of time, with many other bidders increasing their bids accordingly.

Founder of NFEX: A new address created in just 6 days quickly ranked fifth on the Blur scoreboard relying on price manipulation

The NFT market has been plagued by price manipulation, and the situation seems to be getting worse. Recently, NFEX founder nfex dragon sounded the alarm on Twitter, warning investors about the dangers of market manipulation.

What is Market Manipulation?

Before delving into the problem of price manipulation in the NFT market, it is essential to understand what market manipulation is. Market manipulation refers to the Act of artificially influencing the demand or supply of a security or commodity in order to gain an unfair advantage over other market participants. It can be achieved through various strategies such as spreading false rumors, insider trading, wash trading, and pump and dump schemes.

Price Manipulation in the NFT Market

The NFT market is not immune to price manipulation, and it has become a significant concern for market participants. Price manipulation can occur in various ways in the NFT market. For instance, it can happen through the use of bots that artificially inflate prices, creating an illusion of high demand. It can also happen through the use of bid shilling, which involves creating fake bids to attract genuine bidders.
Recently, nfex dragon raised the alarm on a new address in the NFT market that had rapidly soared to the top five positions on the Blur scoreboard. This new address was only created six days ago, and its sudden rise in rank made nfex dragon suspicious. Upon further examination, he uncovered evidence of price manipulation.
The nfex dragon highlighted that manipulators in the NFT market typically bid on 30-80 NFTs, and their bids rise sharply over a short period of time, causing other bidders to increase their bids. This tactic is common in the NFT market and is a classic example of how market manipulation works.

The Impact of Price Manipulation in the NFT Market

Price manipulation in the NFT market has far-reaching effects. It creates an unequal playing field for market participants, with some investors being able to profit off the manipulation while others suffer major losses. The long-term effects of price manipulation include undermining the trust of investors, leading to a loss of interest in the NFT market.

Solutions to Combat Price Manipulation

The NFT market is still in its infancy, and as such, there are no foolproof measures to combat market manipulation. However, several measures can be taken to mitigate the damage caused by price manipulation. One of these measures is the use of decentralized marketplaces that can help eliminate central points of failure, making it harder for manipulators to operate.
Additionally, the use of transparency and accountability measures can also help combat price manipulation. Investors should demand transparency from NFT marketplaces, which includes providing information on the bidding history of NFT assets traded. If marketplaces cannot provide transparency, investors should think twice about investing their money.

Conclusion

The NFT market has enormous potential, and it is vital that market participants take measures to prevent price manipulation, which can dampen investor confidence in the market. The nfex dragon’s revelation about price manipulation in the NFT market should serve as a warning to other investors to tread cautiously.

FAQs

Q: What is the NFT market?
A: The NFT market refers to the market where Non-Fungible Tokens (NFTs) are traded.
Q: What is market manipulation?
A: Market manipulation refers to the Act of artificially influencing the demand or supply of a security or commodity in order to gain an unfair advantage over other market participants.
Q: What can investors do to combat price manipulation in the NFT market?
A: Investors can demand transparency from NFT marketplaces, use decentralized marketplaces, and employ cautious investment strategies.