A Study on Layer 2 Blockchain Protocols and the Market Manipulations in the Bored Ape Yacht Club NFT Collection

Abstract

This thesis presents a comprehensive survey of blockchain layer 2 scaling solutions and investigates the phenomenon of market manipulation within the Bored Ape Yacht Club (BAYC) non-fungible token (NFT) collection. The emergence of blockchain technology has revolutionized various industries, and NFTs have gained significant attention due to their unique properties. However, scalability remains a major challenge for blockchain systems, limiting their widespread adoption. Layer 2 scaling solutions have emerged as potential remedies to address this scalability issue. The primary objective of this research is to provide a thorough analysis of the different layer 2 scaling solutions available in the blockchain ecosystem. A comparative study is conducted, assessing their strengths, weaknesses, and overall effectiveness in improving transaction throughput and reducing fees. The survey encompasses various approaches, including sidechains, state channels, and off-chain computation protocols. Each solution is evaluated based on criteria such as scalability, security, decentralization, and interoperability. The findings provide valuable insights into the current state of layer 2 scaling and guide future developments in this field. Additionally, this thesis delves into the BAYC NFT collection, which has gained significant popularity and market value. However, concerns regarding market manipulation within the BAYC ecosystem have arisen, raising questions about its fairness and integrity. Therefore, the study investigates potential market manipulation practices that may occur within the BAYC NFT market. It explores various forms of manipulation, including pump-and-dump schemes, wash trading, and front-running. The analysis employs data-driven methodologies, including statistical analysis and pattern recognition, to identify and understand such manipulative activities. The data for analysis is collected from reputable blockchain data sources, such as Etherscan and Moralis, including on-chain transaction records, smart contract events, and market trading data. The results of this research contribute to the existing body of knowledge in the fields of blockchain scalability and NFT market analysis. The survey of layer 2 scaling solutions provides a comprehensive overview for practitioners and researchers, facilitating informed decision-making when choosing appropriate solutions for blockchain applications. Furthermore, the investigation of market manipulation practices within the BAYC NFT collection raises awareness about potential vulnerabilities in the NFT market and suggests measures to mitigate such risks. Overall, this thesis advances our understanding of blockchain layer 2 scaling and market manipulation in the context of NFTs. It provides valuable insights into the technical and economic aspects of these topics, paving the way for further research and development in the blockchain ecosystem