Impact of Scalping Bots on NFT Sales :
Bots have significantly impacted the e-commerce industry, particularly with limited edition products released. Sadly, technological progressions like NFTs, due to their market growth, are now targets for these bots. Non-fungible tokens (NFT) are unique cryptographic tokens existing on a blockchain which are un-replicable. NFTs are commonly sold via auction on the open sea marketplace since their value is decided based on what others are willing to pay. These bots that affect NFT are NFT bots. They manipulate NFT prices and product availability and can sell fake products. Although the NFT bot market is relatively new, bots like scalping bots are nothing new. It focuses on manipulating NFT prices, ensuring a sale at a favourable price and a better resale value which in return affects NFT sales. With that, this page explores how scalping bots operate in NFT and the impacts of scalping bots on NFT sales.
How do scalping bots operate in NFT?
Scalping in NFT is profits made from slight price swings. Examples of NFT bots are spoofing, sniper and scalping bots. Scalping bots are automated instruments that quickly purchase products in bulk, making it challenging for respective customers to purchase limited products. In NFT, scalping bots operate by monitoring targeted websites and checking for interesting releases and early links of products so that when the product is available, the bot generates multiple orders without being blocked or detected by bypassing security controls. A checkout process will automatically complete when this is done, leaving no stock for genuine human buyers.
What are the impacts of scalping bots on NFT Sales?
NFT markets need to attract and retain consumers. Thus, when scalping bots manipulate NFT pricing and sales, it harms the brand’s reputation and potential clients. The impacts of scalping bots on NFT sales are listed below.
• It drives NFT prices down. Bots bid on many NFTs below the asking price till the price hits its limit. So when the NFT is relisted, its value decreases, allowing the bot operator to make a lower offer than the asking price and higher profits when NFT is resold.
• It gives room for fake bids, which manipulate NFT prices. Here, sellers may bid on their NFTs below market price, influencing other holders who bought at or above market price to see market prices as low, so they panic sell at a lower price than the original, causing a reseller to make huge profits due to price drop.
• It drives NFT prices up by purchasing all NFTs for sale at the lowest price, increasing the popularity and resale value of the NFT. These bots, therefore, deceive users into believing the NFT is worth more than it is.
As NFT bot technology advances, bots like the NFT scalping bots are increasingly being used to manipulate NFT prices and the NFTs system, which negatively affects NFT sales. Therefore, business website owners must implement efficient mitigation techniques to protect NFT markets, their reputation and customer experience.