A Twitter user, SD (@nfexdragon), has uncovered a market manipulator in the NFT market that uses illegal tactics to profit from uninformed bidders.
How the market manipulator operates
@nfexdragon has outlined how the manipulator operates, warning the community to protect themselves against their actions.
According to the research done by the Twitter user, the bidders start with low bids for collections of over thirty to eighty items and quickly raise their prices as the amount increases. This is known as spoofing the market in the financial markets and is prohibited. The manipulators then raise their bid price, and so do other bidders.
Once they have amassed sufficient holdings, the manipulators sell them all at once to the remaining bidders, generating a profit and leaving the uninformed bidders with NFTs at exorbitant rates.
To avoid the risk, uninformed bidders frequently sell their NFTs for a loss, which causes a cascading effect in price. The NFTs are distributed to numerous rounds of bidders, who lose money until they stabilize later.
How to protect yourself from such manipulators
Manipulators bid the highest on popular projects like Clonex, Doodles, Pudgy Penguins, and Moonbirds. Therefore, you are encouraged only to bid along if you know who has been purchasing.
If you notice that the manipulators are purchasing, they ought to follow suit before driving up the price and offering to sell to them. It is also important to note that you should start bidding on these collections after rounds of dumping have taken place because the price may have been oversold.
The NFT industry has recently received a lot of publicity; however, dishonest people are always looking to take advantage of others in every market. The community must be aware of these manipulators and take necessary precautions, such as reporting any manipulators they come across to avoid falling victim to their actions.
