For Some Reason, Wash Trading Happens on Decentralized Exchanges Too

[Goodcat49]

Wash trading is happening in some instances on Binance DEX and Loopring, showing that decentralized exchanges are not immune to volume inflation.

Decentralized exchanges are generally liked for their transparency and lack of custody, reducing the trust requirements in their operators.

Many centralized exchanges have been caught in a peculiar type of manipulation used to inflate their trading volumes. This was first highlighted by the Bitwise Report released in March 2019, which analyzed trading patterns on some of the platforms to conclude that up to 95% of reported Bitcoin trading volume at the time was essentially fake.

One of the ways to inflate volume is the practice of wash trading, where a single entity acts as both the maker and taker of an order, essentially trading with itself. While wash trading mostly just benefits the exchange by inflating its reported statistics, incentive schemes like transaction fee mining have been used by some exchanges to reward users for wash trading.

https://cointelegraph.com/news/for-some-reason-wash-trading-happens-on-decentralized-exchanges-too