22 Aug 2022
Degens are finding favor with NFTs
Sudoswap has experienced tremendous growth since the launch of its automated market maker SudoAMM on July 8. On August 16, it facilitated 15.4% of OpenSea’s NFT trading volume—not bad for a project launched less than two months ago.
Sudoswap is a decentralized NFT marketplace that introduces an automated market maker like Uniswap to NFTs, allowing users to trade and swap NFTs using liquidity pools rather than standalone listings. More broadly, it’s a step in the direction of NFT financialization.Instead of a traditional buyer-to-seller relationship, SudoAMM uses preprogrammed liquidity pools to buy and sell NFTs. In other words, it allows users to instantly sell their NFTs into a pool at a quoted price, similar to limit orders, rather than having to accept a bid like on OpenSea.Because it allows users to deposit a combination of NFTs from a single collection and ETH along a specific price range (bonding curve), anyone can become a liquidity provider for NFTs and earn fees as other users swap NFTs for ETH or vice versa. This makes it one of the few opportunities in DeFi and NFTs to earn real yield.So far, the protocol has seen good traction, adding 14,700 users and 13,000 ETH in trading volume since it launched. The numbers are nothing close to OpenSea, however, and the complex nature of the product likely won’t appeal to the mass NFT market.Ultimately, Sudoswap is attacking the problem of liquidity, which is especially hard for NFTs, but matters because it creates more efficient markets. Nobody has solved it so far, but perhaps Sudoswap will. And maybe future NFT markets will be dominated by degens.