Wu Shuo Author|Liu Quankai
Editor of this issue|Colin Wu
Since August, the rapid growth of SudoAMM transaction volume and number of users has attracted the attention of NFTer. According to Dune Analytics data, as of August 14, the current SudoAMM transaction volume has exceeded 6900 ETH (>$10 million), of which since August The transaction volume accounted for nearly 85%. Thanks to the listing of the Based Ghouls Pool, which is called the "official pool" by the community, this "Uniswap V3 in NFT" that was launched as early as early July but has been tepid has been revitalized, and then attracted crypto with its novel model. The forwarding and attention of CT, the publicity of the media, and the holders of well-known NFTs such as Azuki and Clone X built pools on it. The exposure of SudoAMM increased suddenly, and various data ushered in a small climax in August.
SudoSwap uses the mechanism of AMM to try to solve the NFT liquidity problem. The mechanism is actually not complicated. If you are a player familiar with DeFi, the function curve of Uniswap AMM V3 and x*y=k must be familiar. LP in Uniswap V3 allows users to make a market for TokenA-TokenB within a custom price range. Similarly, SudoAMM cleverly uses NFT as TokenA and ETH as TokenB, allowing users to specify NFT-ETH on SudoAMM In-price market making. For buyers and sellers, the purpose of instant buying and selling can be realized through the pool, and selling can also be done similar to OpenSea pending orders. For LPs, they can choose NFT-ETH bilateral market making similar to V3 to earn transaction fees, or they can only do NFT or ETH unilateral market making to obtain ETH or NFT.
With the recent outstanding performance of SudoAMM, the topic of NFT liquidity solutions has suddenly increased. This article tries to talk about SudoSwap's adaptation use cases in liquidity scenarios. First of all, I recognize the attempts and contributions made by SudoAMM in NFT liquidity, but the same basic point of view is that different types of NFT should adapt the corresponding liquidity solutions according to different demand scenarios, so SudoAMM is in my opinion It just represents a specific usage scenario and represents one of the layers of NFT liquidity hierarchy. In the future, as the NFT market becomes more specialized and vertical, and the scenarios are split into more details, the adaptation of NFT liquidity is believed to be more hierarchical.
Artwork and top blue chips, liquidity does not need to be solved
The issue of NFT liquidity is a common topic. But for some NFT targets, liquidity is not entirely a problem worth solving, so naturally there is no need to use SudoSwap. These targets can be roughly divided into two categories: works of art and top blue chips.
Works of art, such as ArtBlocks, contain the style of painting, the ideological trend of the creator, and even the status of the artist. They have extremely high ornamental value and collection value. Buying and selling; In addition, each pair of paintings has a clear difference. Even a Chollima needs Bole, and the painter also needs a person who appreciates the painting. The emphasis is on fate, and there is no need to be tainted by speculators.
Top blue chips may also not need direct trading liquidity, because most of them may be loyal long-term holders. In the further future, top blue chips will gradually become financial accessories and be applied in lending, leasing and other markets. It is a situation where there is a price but no market, and no one places an order. The two top blue chips on the market, BAYC and CryptoPunks, have this qualification, but they may not be expensive enough yet.
cc0/Meme may be the most suitable NFT target for SudoAMM's liquidity solution
SudoSwap is equivalent to treating the entire NFT series as having only 10k or a fixed number of FTs for instant transactions, and does not pay much attention to rarity and attributes. For cc0, the biggest feature on the trading side is the floor-sweeping madness without over-considering the rarity, and the existence of a "platform" that is more like a "platform", which derives from Erchuang and Vibe. These two points are highly compatible with SudoSwap. The biggest danger facing unofficial derivatives is that they are vulnerable to being removed from the NFT platform. OpenSea, as the NFT platform with the best trading depth and popularity, is the platform of choice for all kinds of memes, but it often holds the banner of "protecting authentic products" and has a strong centralized power to remove or revoke an NFT at will, while This is fatal for all kinds of secondary cc0 protocols.
With the influence of OpenSea, delisting basically means death and the drying up of liquidity. A recent example is that after Moonbirds announced its transformation into the cc0 protocol, the crazy growth of Moonbirds imitation disks, especially Moonbirds2, has been favored by many users, and there are a lot of big players who continue to sweep the floor, but OpenSea claims the so-called infringement He was taken off the shelves in the name of piracy, and then died.
But the so-called imitation disk is actually the Meme of the original owner, and even the original owner can be a Meme. With the help of the cc0 protocol, Meme can greatly expand the creativity and communication power. Whether it is recognized or not, Meme or imitation disk should not be left to the centralized It is managed by the platform, but judged by users and the community. When a Meme is recognized by the market, its transaction volume can be very crazy. In other words, whether a meme is interesting enough depends on its fluidity at a certain stage. With the help of SudoAMM's function curve, its floor will gradually go up. So for users who provide LP and NFT, it is a win-win situation. What SudoSwap gives is not only liquidity support, but also a counterattack against centralized power. If one day a Meme NFT delisted by OpenSea ushers in explosive growth in SudoSwap, this will be the best blow to the centralized power of the decentralized protocol.
Game items are suitable for SudoSwap, but do not necessarily require SudoSwap
Metaverse game props need to have the non-homogeneous properties of NFT, but most of them do not have high requirements for rarity, which is a major target suitable for SudoSwap. But the problem is that metaverse games are often exclusive in the early stage. Subjectively speaking, the platform prefers to master the NFT liquidity by itself and build its own NFT market for game items. The establishment of the NFT market, on the one hand, brings income through sales and circulation, part of which is owned by the platform, and whether or how much profit is given to NFT holders or game players can be determined by the community; on the other hand, by understanding the supply and demand of NFT in the market, In the early stage, the project party can control the total amount of NFT to avoid inflation. Objectively speaking, most of the current game props are meaningless without the game itself, so why need a third-party market.
NFT project parties have their own liquidity through SudoSwap
Game props may not be suitable for establishing their own liquidity in the third-party market, but other PFP avatars may be feasible. Some project parties tend to reserve x% of NFTs to increase revenue from additional sales or auctions, so they can now create their own on SudoSwap through the reserved NFTs and ETH obtained in public sales, or they can Considered to be the official Sudopool, the project party itself provides liquidity for their own NFT, and they earn 0.5% of the LP fee from it, instead of relying on royalties to obtain secondary income.
Introducing NFT Market Maker via SudoSwap
The introduction of NFT market makers may initially be introduced by project parties or large holders who contact third-party institutions. Through market makers, NFT can be used for quantitative trading strategies, arbitrage, long and short volatility, etc., in order to achieve programmatic trading scale. For traders, they don't have to be forced to be holders, and they don't even need to understand the culture and roadmap of this NFT. When the NFT trading volume and liquidity are strong enough, buying in batches is going long at the floor price; selling in batches is shorting. On the other hand, if you can buy and sell as you go, this guarantees the price support of NFT and provides conditions for NFT to be used as collateral for loans, which in turn increases the stability of the NFT market to a certain extent.
SudoSwap mainly focuses on floor price NFT in the exploration of NFT liquidity. It is true that floor trading accounts for the majority of NFT trading volume, but if the rarity is not considered, it means that the values of the same series of NFTs are all convergent. Evolved into another sense of FT. SudoSwap does not solve the pricing problems posed by NFT rarity/attributes. In addition, there are especially many seller-only pools on SudoSwap. Some users just want to use SudoSwap to make a faster change of hand, and even to some extent it provides convenience for some NFTs with unknown prospects. This is also important for the loyalty of NFTs. A challenge.
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