I noticed that many beginners in crypto still don't understand how wash trading works. Let's figure it out because it's really important to know.

Essentially, wash trading is when someone (a trader, exchange, or bot) controls multiple accounts and constantly buys and sells the same asset to themselves. No real ownership change, no actual risk — just fabricated transactions that create the illusion of high volume and demand. This is an illegal scheme that deceives the rest of the market.

In crypto, it's especially easy to do due to anonymity and the number of unregulated exchanges. Bots can execute hundreds of buy and sell orders in seconds without moving any real money. It's often done to get listed (with minimal volumes), attract retail investors, or manipulate rankings.

A typical wash trading scheme has three stages. First, the trader sets up several accounts and wallets under one asset. Then, synchronized buy and sell orders are executed between these accounts — all automated on DEX or CEX exchanges. In the third stage, techniques like layering (fake orders that are instantly canceled) are used to cover tracks.

The goal is always the same — influence the price, qualify for airdrops or volume rewards, or simply manipulate statistics. And if you see a token with wild volumes but low price and no real interest — there's a high chance it's wash trading.

So always check actual volumes, order book depth, and community activity. On Gate, you can easily distinguish real volumes from fabricated ones if you know what to look for. This is basic trading hygiene.