Why is the upcoming airdrop of sudoswap so concerned

The recent decline of the NFT trading market has been frequent, and the liquidity of the entire market has been greatly reduced. At this time, SudoSwap, which has emerged in August, has brought the trading market based on the AMM mechanism into the public eye with its super-strong growth data.

As early as July 23, the head of Uniswap NFT products posted on social media that Uniswap will realize NFT transactions by integrating sudoswap, while accessing the on-chain liquidity provided by sudoAMM.

NFT liquidity provider

In March of this year, 0xmons, one of the founding team members, published an article detailing the specific content of sudoAMM.

sudoAMM is a centralized liquidity AMM protocol designed for NFTs. Traders can enjoy low slippage swaps between NFTs and tokens, and liquidity providers can better control the price range of their LPs and set up dynamic buy and sell walls.

Unlike most other NFT marketplaces today, sudoAMM uses an on-chain liquidity pool rather than an off-chain order book. While this does add some gas overhead, the team has been careful to keep these costs to a minimum.

In return, anyone can run their own frontend and indexer, enabling a decentralized-centric approach. This also allows other on-chain entities (such as DAOs) to more easily participate in the NFT market, opening up interactions, such as setting up NFT purchase walls transparently on-chain.

In July, sudoswap publicly released the NFT market protocol sudoAMM.

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Officially, at present, the NFT market relies on a centralized order book, and there are risks of downtime and centralization. sudoAMM changes this by going completely on-chain. Anyone can get the same liquidity that the sudoswap marketplace uses in their application using just Ethereum.

Users can: create liquidity pools and gradually buy and sell NFTs according to the price curve, provide liquidity to the liquidity pools that buy and sell NFTs to earn fees, directly list their NFTs at a fixed price. In addition, LPs have full control over the pricing of liquidity pools and can make adjustments at any time.

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The possibilities for new pricing models are endless: LBP style curves, oracle-based price updates, adaptive transaction fees, and more. And thanks to sudoAMM’s modular architecture, users can add new price curves without affecting existing pools or curves.

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In short, the protocol will be open to anyone to create and trade pools for any NFT at launch.

Traders will be able to:

  • Swap NFTs for ETH
  • Convert ETH to NFT

Liquidity providers will be able to:

  • Deposit ETH and receive NFTs when traders exchange with liquidity pools
  • Deposit NFTs and receive ETH when traders exchange with liquidity pools
  • Deposit ETH and NFTs and receive transaction fees when traders exchange with liquidity pools

As a trader, the experience is similar to other exchanges.

As a liquidity provider, the experience is most similar to Uniswap v3. Users select a price range to provide liquidity to them and deposit the asset.

Technically, the sudoAMM contract supports the creation of arbitrary ERC721/ERC20 pools. However, only ETH will be supported for now to improve routing and liquidity across pools.

In addition, sudoswap officials said that the market structure of NFTs is inefficient due to fees. Buyers typically need a 10% price increase to break even. But transacting on sudoswap means buyers only pay a 0.5% fee (sudoswap removes transaction royalties), compared to the usual 7.5% (2.5% + 5% royalty) fee on other platforms for better discovery price.

In a nutshell, Sudoswap is an NFT DEX that allows users to buy and sell NFTs decentralized by building their own NFT liquidity pools. Additionally, the platform is optimized for gas fees, charging only 0.5%, which is five times lower than the 2.5% fee OpenSea charges.

Governance

The sudoAMM protocol will be governed by the $SUDO governance token.

The token will be non-transferable, and post-issuance transferability votes will also be deferred to on-chain governance.

team

The initial development team for sudoAMM included:

  • 0xmons (smart contracts/frontend)
  • BoredGenius (Head of Smart Contracts)
  • 0xhamachi (backend)

feature

In the team’s release Digging Deeper: sudoAMM vs. other AMMs, the founding team noted that sudoAMM offers efficiency and flexibility improvements.

First, efficiency. Any protocol that first uses Uni v3 (or any other fungible token AMM) for price discovery will incur additional gas overhead when first converting NFTs to tokens before doing pricing calculations. In sudoAMM, native NFTs are paired with ETH. No additional conversion overhead is required.

Second, flexibility. As market conditions change, LPs may wish to adjust the parameters of their funding pools. sudoAMM provides many options for LP. At any time, they can:

  • Adjust the price range of their LPs (eg from [0.667 ETH, 1.5 ETH] to [0.5 ETH, 2.0 ETH])
  • Adjust the current pool price (e.g. from 1 ETH to 0.75 ETH, the bid/ask quotes are automatically adapted)
  • Adjusted buy/sell fee percentage

sudoAMM also provides native support for DCA-style strategies through single-sided liquidity pools. Like the Uni v3, the LP can be stored on one side of a pair. For example, swap only NFT for ETH (as NFT price rises) or only ETH for NFT (as NFT price falls). Unlike Uni v3, these pools actually only allow swaps in the desired direction, which means that once the price changes, there is no need to “buy back” in the unfavorable direction.

Summarize

Compared with the current market, sudoAMM has the following advantages:

1. Compared with platforms such as OpenSea, sudoAMM is more decentralized and conforms to the spirit of Web3.

2. To a certain extent, the liquidity of NFT has been increased. It may bring players who are more familiar with DeFi gameplay into the NFT market.

3. The removal of transaction royalties is a positive for NFT traders.

4. Backed by Uniswap, traffic is not a problem.

However, sudoAMM also has certain risks:

1. Protocol security issues, which may be exploited by hacker organizations.

2. The cancellation of transaction royalties has dampened the enthusiasm of the project party to a certain extent.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/why-is-the-upcoming-airdrop-of-sudoswap-so-concerned/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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