Publication date
08/17/2021
Language
English
Page number
41
Reading time
20
Format
PDF to download
Level
Intermediate
NFT Safe Pratices Guide
Free · 2021
Data doesn’t lie. At NonFungible we analyze it and make the complex simple and freely accessible for everyone.
The NFT Market has been in full craze mode since the start of the year. We have witnessed multi-million-dollar sales almost every week with new projects announced each day, copycats are being created from copycats.
Details
Key points
- What to check before buying an NFT?There are numerous NFT projects, with dozens of new promising ones popping up everyday. Sometimes, because of misleading marketing campaigns or inflated market volumes, it may be complicated to truly identify what is a promising project and what is not. You have probably read on a lot of related websites that you should “DYOR” or “Do Your Own Research” before purchasing any asset, but where should you start and what is the right criteria? This section is intended to help you drive forward your own due diligence before investing into any NFT project or purchasing an asset. As the NFT ecosystem is already extremely broad, from Art to Gaming and Metaverses, the due diligence process is necessarily different depending on the particular asset type.
- Is there wash trading in NFT markets?As mentioned earlier, the objective of our work in this report is to help everyone gain autonomy in their analysis of the NFT Markets, with the right tools and the necessary knowledge. Before going into further detail in this section, we must return to the assumption which is at the origin of our research work: "There is Wash Trading in the NFT Market". In order to validate this hypothesis and to succeed in quantifying Wash Trading, it is first necessary to identify in what form this Wash Trading takes place, how to recognize it and what reasonable doubts lead us to consider this or that transaction is an illegitimate one.
Summary
We have always done our best to help the NFT industry remain as healthy and transparent as possible. In recent years, we have published several articles* on the risks and abuses within the ecosystem** in an effort to raise awareness among the various stakeholders. This year, we have decided to go even further and publish a comprehensive report which covers the good practices of Due Diligence in Wash Trading.
The purpose behind this report can be divided into five objectives:
1. To make the NFT world a healthier place for everyone.
2. Bring further transparency and honesty to the booming NFT Markets.
3. Reduce the volume of suspicious transactions.
4. Ensure the long-term sustainability of this market.
5. Promote individual responsibility, i.e: Do Your Own Research “DYOR”, Due Diligence, community whistleblowing etc...
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