Wash trading is known to be common in incipient financial markets, and decentralized finance (DeFi) is no exception. Solidus Trade Surveillance data shows that since September 2020, liquidity providers (LPs) on Ethereum-based decentralized exchanges (DEXs) have wash-traded at least $2 billion worth of cryptocurrency, manipulating the prices and volumes of more than 20,000 tokens. In aggregate, LPs have executed wash trades in 67% of the almost 30,000 DEX liquidity pools in our sample, and wash trading has constituted 13% of the these pools' total trading volumes.
The liquidity pools we studied comprise just 1% of all pools by count and 0.3% of all pools by volume across every blockchain and DEX. As such, this is a lower bound estimate; the true amount of DEX-based wash trading that has taken place since September 2020 is likely an order of magnitude larger.