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Wash Trading Detection and 1000 XRP Weekly Rewards

December 22, 2025
Wash Trading Detection and 1000 XRP Weekly Rewards

Doubling Rewards to 1000 XRP per Week

We're excited to announce that starting with Epoch 35, we're increasing the weekly reward pool to 1000 XRP - double our previous reward level.

Epoch 35-38 Rewards Schedule

Many of you have asked when we would increase rewards, and we appreciate your patience. We haven't done so until now because we've been focused on addressing foundational issues with the platform, particularly around detecting wash trading and gamification.

Our goal has always been to ensure a level playing field where rewards aren't unfairly captured by bad actors before increasing the reward pool. With our new wash trading detection system now in place, we're confident we can offer larger rewards while protecting legitimate market makers.

What is Wash Trading?

Wash trading occurs when a user trades with themselves or coordinates trades with others to artificially inflate their trading volume and capture a disproportionate share of rewards. This undermines the entire purpose of our liquidity mining program, which is designed to reward genuine market makers who provide real liquidity to the XRPL ecosystem.

Our Wash Trading Detection System

We've implemented a comprehensive analysis system that identifies potential wash trading patterns by examining several key factors:

Detection Criteria

  • Counterparty Concentration: We analyze if a wallet trades a significant percentage of its volume with a single counterparty. Legitimate market makers typically trade with many different counterparties, while wash traders often show concentrated trading with specific addresses.

  • Platform User Trading: We examine the ratio of volume traded between registered platform users versus external addresses. An unusually high proportion of trades occurring exclusively between platform users can indicate coordinated activity.

  • Suspicious Patterns: We flag wallets that show unusually high concentration on specific counterparties, circular trading patterns, or other behaviors inconsistent with genuine market making.

Our system continuously monitors trading activity across all registered users and markets. When suspicious patterns are detected, accounts are flagged for manual review by our team.

The Wash Trading Resolution Process

When we identify a user whose trading activity exhibits wash trading characteristics, we implement the following process:

Step 1: Account Freeze

The user's account is placed under review. They will continue to accrue rewards for their trading activity, but they will not receive reward checks until the matter is resolved.

When a frozen user visits their My Rewards page, they will see the following notification:

Frozen User Notification

Step 2: User Notification & Response Period

Frozen users are notified and given the opportunity to contact us and provide evidence of legitimate trading activity. We understand that some trading patterns that appear suspicious may have legitimate explanations, and we want to give users a fair chance to explain their activity.

How to contact us:

Step 3: Resolution

After reviewing the user's explanation and any evidence provided, we will make a determination:

If cleared: The account freeze is lifted, and the user will receive all accrued reward checks and continue earning rewards normally.

If confirmed as wash trading: The user's frozen rewards will be added to a subsequent epoch's reward pool, benefiting legitimate market makers.

If no response: If a user does not contact us within a reasonable amount of time (typically 14 days), we will treat this as an admission and redistribute their frozen rewards.

Important Note on Authority

XRPLiquid reserves sole authority to determine whether trading activity constitutes wash trading. While we strive to be fair and thorough in our analysis, our decision is final. We encourage all users to trade legitimately and reach out promptly if they believe their account has been incorrectly flagged.

Community-Powered Detection

We want to thank the community for their help in identifying potential wash trading activity. Since XRPLiquid rewards are based entirely on on-chain XRPL activity, all trading data is publicly visible and verifiable by anyone.

This transparency is a feature, not a bug. It means that our community can help us maintain the integrity of the rewards program by spotting suspicious patterns that our automated systems might miss.

If you notice suspicious trading activity on the blockchain, we encourage you to reach out to our team in the #xrpliquid channel on the Hummingbot Discord. Your reports help us keep the playing field fair for all legitimate market makers.

Looking Ahead

With this system in place, we're committed to continuing to grow the reward pool as our platform matures. Our goal is to make XRPLiquid the best place to earn rewards for providing liquidity on XRPL, while maintaining the integrity that makes those rewards meaningful.

Thank you for your continued support and for trading honestly. Together, we're building a fairer, more liquid XRPL ecosystem.

Questions?

If you have questions about the wash trading policy, the resolution process, or your account status, please reach out:

Happy (legitimate) trading!

- The XRPLiquid Team