NFT Wash Trading on Ethereum – Part 2: An Examination of the Blur Platform (Blog)

NFT Wash Trading on Ethereum – Part 2: A Close Look at Blur’s Marketplace Activity

By [Your Name], DeFi & Crypto News Desk
Published March 4 2026

Background – The wash‑trading problem in NFT markets

The explosion of NFT trading on Ethereum in 2021 prompted a wave of new marketplaces eager to poach volume from the dominant OpenSea platform. Many of these entrants, most notably LooksRare and X2Y2, bundled token‑based reward schemes with their trade‑execution services. While the incentives succeeded in drawing users, they also opened the door to “wash trading” – the practice of buying and selling the same asset solely to inflate on‑chain statistics or to harvest reward tokens.

Wash trading is prohibited for most regulated commodities under the U.S. Commodity Exchange Act of 1936, but the legal framework has not yet been extended to crypto assets and NFTs. Consequently, the practice has remained largely unregulated, prompting analysts to develop on‑chain detection methods.

In late‑2022, a researcher released a four‑heuristic filter designed to flag suspicious NFT trades on Ethereum. Applying the filter to the entire NFT volume dataset revealed that roughly 45 % of all Ethereum NFT trading volume (≈ $30 billion) could be classified as wash trading. The findings were corroborated by outlets such as CoinDesk, The Defiant and CoinTelegraph.

With those results in mind, the same analyst turned their attention to Blur, a marketplace that launched publicly in October 2022 and markets itself as a platform for professional NFT traders.

Blur’s positioning and incentive structure

Blur combines a traditional order‑book marketplace with an aggregation layer that routes orders to other venues (e.g., OpenSea, Genie, Gem). Its value proposition centers on ultra‑low fees, rapid settlement, and a UI built for high‑frequency NFT trading.

Unlike its rivals, Blur does not reward volume directly through a daily token‑distribution model. Instead, the protocol plans to decentralize via a native token, $BLUR, which will be airdropped in three distinct phases:

1. Phase 1 – Retroactive airdrop for anyone who traded on Ethereum in the six months preceding Blur’s launch (explicitly excluding wash trades).
2. Phase 2 – For users who listed NFTs before 6 December 2022.
3. Phase 3 – For participants who placed bids after the bidding feature went live.

The three phases are the only criteria for the upcoming $BLUR airdrop, scheduled for 14 February 2023. By tying rewards to genuine liquidity provision rather than raw volume, Blur aims to deter the wash‑trading strategies that plagued LooksRare and X2Y2.

Data‑driven assessment of Blur’s activity

1. Minimal wash‑trade footprint

Applying the same four‑heuristic filter to Blur’s on‑chain data produced the following results:

The low trade‑count percentage suggests that most of Blur’s activity consists of genuine market orders. The higher volume share (11 %) results from a small set of high‑value trades that the filter identifies as wash trades—an expected pattern, as wash traders often concentrate large token amounts into a few transactions to maximize impact.

2. User‑base composition

A snapshot of Blur’s registered users (since its public launch) shows 122.4 k distinct addresses, broken down as follows:

• ≈ 63 % migrated from OpenSea
• ≈ 3 % originated from Gem
• ≈ 22 % are newcomers with no prior NFT trading history

The dominance of users from established, low‑wash‑trade platforms reinforces the notion that Blur’s liquidity is being supplied by experienced traders rather than opportunistic wash‑trade bots.

3. Strong absolute user numbers

Weekly active addresses on Blur peaked at ≈ 53 k, dwarfing the peaks on X2Y2 (≈ 14 k) and LooksRare (≈ 9 k). Such scale is indicative of broad adoption and suggests a healthy, organic market.

4. Volume resilience after incentive shifts

Blur’s airdrop criteria transitioned from rewarding listings (until 12 December 2022) to rewarding bids once the bidding mechanism launched. Contrary to expectations that a shift in incentives would cause a dip, listing activity not only persisted but grew after the transition. Moreover, the introduction of a mandatory 0.5 % royalty fee on collections with enabled fees on 2 January 2023 had a negligible effect on overall volume, further hinting at robust organic participation.

5. Consistent hourly volume patterns

Hourly volume charts for Blur display a smooth, continuous flow of trades, lacking the erratic spikes seen on LooksRare and X2Y2—platforms notorious for wash‑trade bursts. On a randomly selected day (6 February 2023), Blur’s hourly volume remained stable, mirroring the behavior of a mature market with a diversified user base.

Why does 11 % of Blur’s volume still appear washed?

Even though Blur’s design explicitly discourages wash trading, a modest proportion of its volume still meets the filter’s criteria. Two plausible explanations emerge:

1. Misaligned expectations – Some participants may have anticipated future token rewards for volume, despite Blur’s explicit communication that only listed, bid, and historical trades qualify.
2. Collection‑level promotion – Traders sometimes inflate the perceived popularity of specific NFT collections by repeatedly buying and selling the same assets, a tactic that can boost rankings on secondary marketplaces and entice naïve buyers. This practice is platform‑agnostic and can occur even in the absence of token incentives.

Key Takeaways

• Blur’s wash‑trade exposure is markedly lower than that of other high‑volume NFT marketplaces, with only about 11 % of volume and 1.56 % of trades flagged.
• User migration from reputable platforms (OpenSea, Gem) and a sizable influx of new traders point to genuine market interest rather than speculative wash‑trade activity.
• Weekly active user counts exceed those of competing venues, underscoring strong organic adoption.
• Volume persistence after incentive adjustments and the imposition of a royalty fee suggest that Blur’s activity is not driven by short‑term reward schemes.
• Hourly volume patterns are smooth and consistent, contrasting sharply with the spiking behavior typical of wash‑trade‑heavy platforms.

Overall, the data supports the analyst’s conclusion that Blur is largely a legitimate marketplace whose growth stems from a well‑executed go‑to‑market strategy rather than the manipulation of on‑chain metrics. While a small fraction of wash trading persists—reflecting broader industry practices—Blur appears to have learned from the pitfalls that plagued earlier token‑reward models.

For readers interested in the broader NFT wash‑trading landscape, the original research (part 1) and the detailed methodology behind the four‑heuristic filter are available on Dune’s blog and accompanying public dashboards.

Source: https://dune.com/blog/wash-trading-2-blur