Wash trading is a manipulative practice in trading such as digital assets or Non-Fungible Tokens (NFTs), where a party makes sales and purchases of the same asset within a short period of time. The goal is to make the price of the asset appear higher and create a false perception of liquidity, as well as attract the interest of other investors.

Wash trading is an illegal practice that is prohibited in conventional financial markets. However, it is still common in crypto markets and NFTs, which tend to be less regulated by official authorities. In wash trading, a trader will buy and resell the same asset within a short period of time, as if there is high trading activity. This creates the illusion that the asset is more popular or valuable than it actually is. Wash trading can cause price distortions and provide misleading information for investors. The practice is essentially a form of market manipulation aimed at generating false profits or attracting investor interest.