A First Look at Shill Looping in NFT Ecosystem

Conference paper (2023)

Authors

Ankit Gangwal International Institute of Information Technology Hyderabad
Apoorva Thirupathi International Institute of Information Technology Hyderabad
Alessandro Brighente Università degli Studi di Padova
M. Conti Università degli Studi di Padova
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Published Date

2023

Language

English

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Abstract

Initially designed to represent ownership of various assets, Non-Fungible Tokens (NFTs) have emerged as a new tool in the blockchain domain for investment and trading. The NFT markets are rapidly budding with significant growth in trading volumes over the last few years. While the NFT ecosystem is continuously evolving, users are exploring astute trading practices to gain financial profits. In this paper, we uncover shill looping, a novel NFT trade practice that NFT owners can exploit to artificially inflate the price of an NFT token. We investigate shill looping and its primary effects in a multi-billion dollar NFT collection called BAYC, showing that approximately 50% of these NFTs exhibit shill looping. Our empirical analysis shows that shill looping significantly boosts the average NFT values by over 45% in the best case. Our initial results highlight the severeness of the shill looping phenomenon and open a new research direction for further exnloration.