According to the news agency Reuters, an NFT token named Meebit was bought for $50.6 million last month and five minutes later, the seller was sold back for as low as $1 million (about Rs 10 crore). Meebit NFT is a computer-generated pixelated image of a virtual character dressed in purple shorts and green sneakers.
Here the wallets of both buyer and seller are being disclosed as unknown. Although blockchain technology creates a public record when an NFT is sold, the names of the people involved are not recorded. An individual can own multiple wallets as both buyer and seller in its trade.
Publicly available blockchain records searched by Reuters revealed that this digital character was one of dozens of NFTs available on the LooksRare marketplace that were bought and sold last month at unusually expensive prices. The report also states that the process of buying and selling between them happened in a very short time.
According to data from DappRadar as of January 31, the top 27 most expensive sales in the entire NFT market in January totaled $1.3 billion (approximately Rs 9,710 crore) between only two wallets on LooksRare, while $2.3 billion (approximately Rs. 17,180 crore) The top 100 sales took place among a total of 16 wallets.
CryptoSlam is another data provider that has reported artificially increased volumes on LooksRare. The company says such trades can be linked to the platform’s rewards system – although Masoit says there was “real” activity on the site as well.
Notably, LooksRare describes itself as “the community’s first NFT Marketplace to reward you for participating”. In this reward system, traders are rewarded with tokens based on the ratio of the total sales volume. This token offered by the platform, called LOOKS, can be used in a system called “staking”, which allows traders to earn a piece of the proceeds from the 2% fees the platform charges on all trades. Is.
Asked by Reuters about all these activities and whether trading volumes have been artificially inflated by the trade, a LooksRare spokesperson said such activities are extremely risky, as traders have to deal with transactions. costs, which are not guaranteed to be recovered.
The trading activity also serves to fuel the ambiguous and speculative nature of the NFT industry, which includes sales volumes of $25 billion (approximately Rs 1,86,770 crore) in 2021, the report says.
This marketplace has been further fueled by collectibles like CryptoPunks and Bored Apes, which have been bought for crores of rupees in recent times. Paris Hilton, Jimmy Fallon, and Justin Bieber have also spent crores of rupees on these NFTs.<!–