This podcast discusses on an academic article, which examines the market microstructure of non-fungible tokens (NFTs) and addresses concerns about market manipulation and the legal status of NFTs. The authors discuss factors influencing NFT price formation and discovery, including fixed price and timed auctions, and how market structure impacts the speed and quality of price discovery. They highlight the importance of transparency and disclose how wash-trading techniques are used to manipulate the NFT market. Finally, the article explores the application of the Howey test to determine whether NFTs should be considered securities and delves into legal and regulatory implications surrounding intellectual property, taxes, and sales tax.

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Reference

Mukhopadhyay, Mayukh and Ghosh, Kaushik, Market Microstructure of Non Fungible Tokens (October 1, 2021). Five Shades of Emerging Business Cases, Eliva Press (Nov 2021), ISBN: 978-1-63648-395-5, Available at SSRN: https://ssrn.com/abstract=3934676 or http://dx.doi.org/10.2139/ssrn.3934676