In some circumstances, is yield farming with non-fungible tokens (NFTs) another term for wash trading?
Yield farming is the process of getting tokens in return for providing crypto assets to fledgling marketplaces. The activity surged this summer starting with decentralized finance (DeFi) money markets like Compound. But now the game has migrated to other markets as well. Just like players at arcades, yield farmers put in money and get tokens in return. Then they use those tokens to play video games, hoping to win a prize by beating the game.
In the NFT space, this dynamic is being pioneered by Rarible, where users are rewarded with rari tokens for buying and selling digital collectibles. Rari token rewards propelled the site to quickly overtake other NFT marketplaces. However, this dynamic also created a fresh set of problems related to wash trading. Traders often swap these reward…