Cryptoassets such as cryptocurrencies and tokens are increasingly traded on decentralized exchanges. The advantage for users is that the funds are not in custody of a centralized external entity. However, these exchanges are prone to manipulative behavior. In this paper, we illustrate how wash trading activity can be identified on two of the first popular decentralized exchanges on the Ethereum blockchain, IDEX and EtherDelta. We identify accounts and trading structures that meet the legal definitions of wash trading, discovering that they are responsible for a wash trading volume in equivalent of 159 million U.S. Dollars. While self trades and two-account structures are predominant, complex forms also occur. We quantify the activity in detail, finding that on both exchanges, more than 30% of all traded tokens have been subject to wash trading activity. On EtherDelta, 10% of the tokens have almost exclusively been wash traded. All data is made available for future research. Our findings underpin the need for countermeasures that are applicable in decentralized systems.

2021 THE WEB CONFERENCE NEWSLETTER
The Web Conference is announcing latest news and developments biweekly or on a monthly basis. We respect The General Data Protection Regulation 2016/679.