What Is Sudoswap? Trading NFTs Instantly With AMM

Even though decentralized exchanges like Uniswap have effectively made trading a smooth process, NFT marketplaces still haven’t caught up with the efficiency. Finding someone to trade NFTs with in NFT marketplaces is a slow and cumbersome process. Sudoswap aims to provide a user-friendly experience for traders by applying an automated market maker (AMM) to NFT trading.

With an AMM, users no longer have to wait for an offer, and they can trade NFTs instantly with others at a fair price as long as there’s liquidity.

What Is Sudoswap?

Sudoswap is a decentralized exchange (DEX) protocol that enables the trustless swapping of non-fungible tokens (NFTs) on the Ethereum blockchain.

The protocol was launched in May 2022 by the developer behind 0xmons, a human-AI hybrid NFT project of animated monsters generated by Generative Adversarial Networks (GANs).

Sudoswap's launch of the NFT automated market maker (AMM) protocol on July 8, 2022 has cemented its position as a leading decentralized NFT marketplace. Just like Uniswap’s AMM, Sudoswap allows you to buy and sell NFTs from a liquidity pool instead of trading with other NFT holders.

Source: sudoswap.xyz

Sudoswap can therefore offer several advantages over centralized NFT marketplaces, such as OpenSea and Rarible. Here are a few key benefits:

• Empowers NFT owners: NFT owners who act as liquidity providers (LPs) get to set their prices in a trading pool and earn fees from the trades. If you’re an NFT collector with many pieces of artwork, this benefits you greatly, since you can easily set a floor price for your NFTs.
• Increased liquidity: Unlike centralized NFT marketplaces which follow an open book model, trades are executed automatically in Sudoswap. This increases the market's liquidity and lowers price volatility.
• No intermediaries: Without any intermediaries who might impose bans on certain NFT collections, users can freely buy and sell all kinds of NFTs without having to censor themselves.
• Lower fees: Sudoswap doesn’t pay creators royalty fees, which effectively lowers the costs of NFTs. While this may pose an issue for creators and cause some ripple effects in the long term, for now, traders stand to gain from it.

How Does Sudoswap Work?

Source: sudoswap.xyz

As an NFT AMM protocol, Sudoswap works by letting LPs deposit NFTs and/or ETH into liquidity pools.

First, you choose to either buy or sell NFTs (or both), deposit your NFTs and/or ETH, and then indicate a starting price and bonding curve parameters.

There are three types of bonding curves that algorithmically set the relationship between price and supply in different ways: Linear Curve, Exponential Curve and Concentrated XYK Curve.

Next, you can trade NFTs from the pool and earn trading fees as people trade from your pool. Every time an NFT is bought or sold, the price of another NFT algorithmically changes for the pool, based on the selected bonding curve. You can choose to switch the pool parameters or withdraw assets at any time.

Since there are as many pools as there are LPs, users can search through the different pools to find their desired NFT at their preferred price.

The sudoAMM protocol is designed to be simple, fair and efficient, with users being charged a minimal transaction fee of 0.5% that’s allocated to the Sudo treasury. If you buy or sell in bulk, you can lower your gas fees, thereby further reducing costs.

How to Buy and Sell NFTs on Sudoswap

Sudoswap makes it easy to buy and sell NFTs in a decentralized manner with its liquidity protocol, which enables buyers and sellers to connect and trade directly. Below, we outline the steps you can take to trade NFTs as well as provide liquidity on Sudoswap.

How to Provide Liquidity on Sudoswap

Source: sudoswap.xyz

Sudoswap's liquidity protocol enables anyone to provide liquidity and earn rewards. Anyone can create buy-only, sell-only, or buy-and-sell pools.

To create a pool, go to the Your Pools tab in the top right corner of the website. Click on + Create New Pool and select the type of pool you want to create.

Depending on the type of pool you create, the process will be slightly different. But generally, you simply have to deposit NFTs and/or ETH, select the NFT collection you wish to trade, and choose your preferred starting price, bonding curve and delta.

Source: docs.sudoswap.xyz

The delta will be the percentage that ‘s automatically adjusted every time an NFT is bought or sold from the pool. So, if you set it at 5%, and someone buys an NFT from your pool, the price will decrease by 5%; and if someone sells an NFT, the price will rise by 5%.

Next, indicate how many NFTs you wish to trade, and then click on Create Pool after confirming that the details of your pool are correct.

Buying and Selling NFTs

If you’re simply buying and selling NFTs on Sudoswap, the process is even simpler. But first, you’ll need to connect your wallet.

1. Buy NFTs

Source: sudoswap.xyz

There are two ways to buy an NFT on Sudoswap.

First, you can select a collection from the collections page. Click on View Item for the NFT you want to buy, then click on > sudo swap and verify the purchase in your wallet.

Source: sudoswap.xyz

Otherwise, you can choose Make Collection Offer, and then key in the NFT amount you want to buy, the price you wish to buy at and, if you’re buying multiple NFTs, the price by which each subsequent purchase will decrease. Then, click on Create Offer.

2. Sell NFTs

Source: sudoswap.xyz

To sell, select a collection from the Collections page, choose the Sell tab, then click on > sudo swap after selecting the NFT you want to sell. Then, confirm the transaction in your wallet to complete the sale.

What Is the Sudo Token?

The Sudo token will be the native governance token of Sudoswap. It will initially be made non-transferrable to ensure proper governance participation.

Sudoswap published information on the yet-to-be-launched SUDO token on September 1, 2022. The initial quantity of SUDO tokens will be 60 million. At launch, 44.9% of the initial supply will be airdropped to XMON holders (41.9%), 0xmons holders (1.5%) and LP providers (1.5%).

XMON holders can take part in a lockdrop event, during which their XMON tokens will be locked for three months to collect their SUDO tokens. For every 1 XMON locked, 10,000 SUDO tokens will be released. Any SUDO tokens that go unclaimed will be returned to the Sudo treasury.

Conclusion

For traders seeking a low-fee platform with instant liquidity, Sudoswap is a perfect choice. However, it may not be the best option for creators looking to monetize their work, as it doesn’t offer royalties. Nevertheless, this unique decentralized NFT marketplace is a great platform for anyone looking to take advantage of the growing NFT market.