OpenSea’s monthly and daily trading volume (Ethereum) (Credit: Dune @rchen8)
Since the Luna thunderstorm triggered a chain reaction, the entire crypto market plummeted, and the NFT market also entered a cold winter overnight. According to reports, according to Dune Analytics data on August 1, OpenSea’s July transaction volume was only $528 million, a drop of 89.12% from the all-time high of $4.857 billion in January 2022, a one-year low.
In the current bear market, on the one hand, NFT investors have to endure the fact that their assets have shrunk on a large scale due to the previous decline.
However, the slump in the NFT market and the continuous decline in transaction volume, criminals “play the list” by brushing the volume, and quickly enter the transaction volume rankings of the NFT trading platform at a very low cost, which makes OpenSea and other NFT trading platforms become A breeding ground for new NFT scam projects .
Detailed Fraud Process
This section will disassemble how it lured NFT investors into the bait step by step through the fraud process of Geometric birds, one of the recent popular new NFT scam projects.
create an illusion
Geometric birds is ranked #6 by 24-hour trading volume on Uniq.cx
If you open the OpenSea homepage on a Tuesday, it’s easy to notice a project called Geometric birds (now delisted by OpenSea) at the top of its 24-hour trading volume charts.
An introduction to the project on OpenSea
When you click on the project homepage and browse carefully, you will find that it is actually an NFT imitation disk project based on Moonbirds as a prototype for secondary creation, with a total of 1.5k, a total of 576 holders, and each person holds 2.6. This The proportion is high but it is still normal. The total transaction volume reached 323E in 24 hours, and the floor price once reached 1.3E at the highest, and then remained at around 1E.
In just one day of going online, the floor price can be maintained at a high price of 1E. You start to think whether this will be the next blue-chip project, so you open Twitter and start searching for more information about it, but you are eating it. The first piece of “toxic breadcrumbs” dropped by the mastermind behind the scenes was just the beginning of the deception and lure.
Information presented by Geometric birds official Twitter
According to the description of the Geometric birds official push: This NFT project was initiated by a studio of John Wilson Clinton, a famous contemporary Hungarian geometric three-dimensional abstract painter. He used geometric elements to create a series of unique artworks, among which his paintings “Hungarian Princess” sold for 4 million euros at Christie’s autumn sale. In addition, on August 12th, there will be his special art exhibition in Hall B of the Hungarian National Gallery.
After you have browsed its official website and OpenSea, you may have a general picture of this project: it was created by a famous Hungarian artist, who even has a personal art exhibition in a national art gallery, At the same time, its NFT market price is outstanding, the total amount of 1.5k proves its scarcity, and the floor price of 1E represents the market’s recognition of its value.
Price point graph of Geometric birds in one day
So you get excited and decide that this is a “potential stock” that has not yet been discovered by the major Alpha groups. Maybe you will be bullish and chase the high in the subsequent uptrend, or be complacent because of “copying to the bottom” in the downtrend . In short, once you buy it, you will completely fall into the trap of this “NFT Pixiu disk”.
Someone tweets that they can’t sell after buying Geometric birds
Later, when you want to place an order, you find that there is no buying order, and someone even posted on Twitter that the NFT that it placed an order for was transferred. At this time, you suddenly realize that the floor price is maintained at 1E because those NFTs whose pending orders are below 1E have been transferred.
Now Geometric birds page on OpenSea shows 404
Finally, nearly 24 hours later, Geometric birds was removed from OpenSea, and its official push did not have any new developments.
The truth: “playing the list” by brushing transactions
In fact, the mastermind behind Geometric birds deceived them by swiping trading volume to get on the OpenSea trading list.
What is scrubbing/wash trading?
According to Investopedia’s definition, wash trading is traditionally the process by which traders buy and sell securities, providing misleading information to the market for profit.
The purpose of brushing the NFT is to make an NFT appear more valuable than it actually is. The method can be to repeatedly resell the same NFT at a high price in two or more wallets, and finally achieve the floor price and transaction volume of the entire NFT project. The purpose of the ascent creates a vision of “false prosperity” . Due to the anonymity of Ethereum addresses, multiple wallet accounts that participate in brushing often belong to the same entity.
Geometric birds’ brush trading
Transaction graph of addresses related to Geometric birds (the addresses shown are not complete)
By tracing the source of the wallet address (hereinafter referred to as address D) of the smart contract deployed by Geometric birds, we can intuitively see that these addresses are inextricably linked.
The parent address of the transfer to address D is like an intermediate node. During this period, transfers from multiple wallets have been collected, and transfers have also been distributed to other addresses. There is also a transfer source from the Tornado mixer. .
Geometric birds’ highest transaction unit price is 28E (Source: NFTGo)
It is the back-and-forth transactions between the above addresses for Geometric birds NFT, which made the transaction volume of this NFT series exceed 300E in less than 24 hours, and the highest transaction unit price is 28E. In addition, there are many large transactions at extremely high prices. .
In the end, based on the total transaction volume of Geometric birds on OpenSea of about 320E and 2.5% of the transaction procedures, the cost of this scam is about 8E (excluding Gas Fee), that is, as long as 8 victims buy it at the floor price of 1E Their NFTs will pay for itself, and the exact number of victims is currently unknown.
In other words, Geometric birds, the “NFT Pixiu disk”, only paid 8E for the handling fee, and it appeared on the billboard of OpenSea, the largest NFT trading market .
How can I not be deceived by the “NFT Pixiu disk”?
1. Fully research
Take Geometric birds as an example. In fact, the artist John Wilson Clinton in its official Twitter is fictitious. Just a search will reveal that there is no information about this “famous artist” on the Internet, about his art exhibition. also cannot be retrieved.
2. Go and see if the wallets that make large transactions are real
Take Geometric birds as an example. Its wallet was created just last month, with few transaction records. The wallet just created spends a lot of money on a new project, which may be alarming.
3. Check the contract code
Taking Geometric birds as an example, the victim posted that after placing the NFT order, the placed NFT was transferred to other wallets. In fact, Geometric birds has set the Batch Burn function in the contract code, which will authorize the transfer of NFT, so that the floor price of NFT will not be lowered by other holders. Therefore, you can take the time to check its contract code in advance before trading NFT to prevent stepping on the pit.
Controversy: Degree of Decentralization of NFT Trading Platforms
On the one hand, OpenSea has been criticized for events such as “banning access to some countries” and “banning stolen NFT transactions”. Many people think that OpenSea’s degree of centralization is too high, which violates the decentralization spirit of Web3.
On the other hand, for events like this “NFT Pixiu disk”, people hope that OpenSea can take more practical actions to remove these NFTs in time to prevent more people from being deceived.
Multiple Twitter KOL accounts have also “promoted” Geometric birds
In this incident, we morally condemn the culprits behind the fraud, and educate the deceived victims for not being careful enough. For trading platforms and KOLs such as OpenSea, it is understandable that they truthfully report and rank according to transaction volume, but Should screening for potential fraudulent projects also be their responsibility?
Well-known blue chips actually have the situation of brushing transactions (Photo source: Dune @21shares)
In fact, according to Dune’s data, there is a common phenomenon of brush volume transactions in NFT projects, and many well-known blue chips such as CryptoPunks, BAYC, etc. are the hardest hit areas for brush volume transactions.
The CEO of data analysis company bitsCrunch also admitted in an interview that more than 33% of NFT transactions are brush transactions .
It can be seen that brush trading has become a problem that cannot be ignored in the NFT market.
Lady Ape Club’s Transaction Graph
Recently, the transaction volume of the NFT market has continued to be sluggish, which makes it cheaper for “NFT Pixiu disks” to brush the volume and “play the list”, so there are many similar fraud incidents. For example, Lady Ape Club, which once broke into the top five in the OpenSea daily trading list, was also questioned by the well-known KOL ZashXBT as a “NFT Pixiu disk”.
So, “NFT Pixiu disk” is on the billboard, is OpenSea an accomplice?
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/new-nft-scam-nft-pixiu-disk-that-can-be-listed-on-opensea/
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