What is Sudoswap? The First Automated NFT Market Maker for Web3 Degens
- Launched in May 2022, Sudoswap is the first automated NFT market maker that aims to solve the lack of liquidity in the NFT market.
- Instead of having to trade directly among themselves, users can deposit NFTs and ETH into liquidity pools, allowing others to buy or sell NFTs through these pools.
If you’ve ever tried trading NFTs, you will surely know how illiquid these assets can be. When you want to buy an NFT, the one you want may not be up for sale. When you want to sell an NFT, there may be no buyers in sight. Luckily, there’s a solution to that.
With Sudoswap, NFT degens can enjoy Uniswap-like experiences when trading NFTs. As a decentralized NFT exchange, the platform runs on an automated market maker (AMM) model to tackle the lack of liquidity in the NFT market.
Given that, let’s take a look at Sudoswap and how you can easily trade NFTs on this innovative platform.
What is Sudoswap?
Launched in May 2022, Sudoswap is a decentralized NFT marketplace that allows users to swap NFTs using an automated market maker model. In particular, the platform allows users to trade NFTs and ETH through user-funded liquidity pools.
Many NFT marketplaces, such as OpenSea, usually run on an off-chain order book model. This is often unsuitable for illiquid markets like the NFT market in this case.
However, this is where Sudoswap shines, as users can buy and sell NFTs through on-chain liquidity pools.
As long as there’s a pool for that NFT collection, users can instantly sell their NFTs into the pool and receive ETH in return. Those who deposit NFTs or ETH into the pool will also earn fees from trades that take place in the pool.
Take note, though, that you may not always get the price you want since the price of the NFTs will change according to the amount of NFTs left.
The more NFTs get sold, the more expensive the NFTs are in that pool and vice versa. This is an effect of the bonding curve that Sudoswap implements for its liquidity pools.
A list of Sudoswap’s pools and bonding curves
There are three types of liquidity pools on Sudoswap: Buy-only pools, sell-only pools, and buy-and-sell pools. Each of these pools may incorporate one of the following bonding curves:
- Linear curve: The NFT price increases or decreases linearly as buys and sells happen.
- Exponential curve: The NFT price increases or decreases by a certain % as buys and sells happen.
As shown in the CloneX NFT pool below, you can tell that it’s a buy-and-sell pool from the double-ended arrow (circled in yellow). Right now, the pool is ready to sell one CloneX at 6.7 ETH and buy one at 6.00651 ETH.
Every time this pool buys or sells an NFT, the price will be lowered or increased by 4%. If you deposit NFTs or ETH into this pool, you will earn 3% of the transaction amount whenever someone swaps with this pool.
Pool creators can set their swap fees to be as low as 0.5%. And buyers do not need to pay for project royalties on Sudoswap.
How to buy or sell an NFT on Sudoswap?
Firstly, head over to Sudoswap and click “Connect” on the top right corner to connect your Web3 wallet. Once done, click “Collections” on the top left to view all collections.
From the list above, select the NFT collection you want to trade, and you will be taken to the individual page for that collection. For instance, this is what the Azuki NFT page looks like on Sudoswap:
As of writing, there are a few ways you can trade NFTs on Sudoswap:
- Buy from direct listings: Search for NFTs at listed prices on the “Buy” page. Then click “View Item” on the NFT you like. You will be taken to a separate page showing full details of that NFT. Click “Buy Now” and confirm the transaction on your MetaMask wallet to purchase that token.
- Make a collection offer: Alternatively, you can offer to buy one or multiple NFTs by creating a pool with a starting price and a price decrease %.
- List NFTs for sale: You can also list your NFTs for purchase with or without any price increments. Just navigate to “Your NFTs” on the top right corner and choose the NFTs you want to list.
- Create liquidity pools on Sudoswaps: If you’re one of the advanced users, you may choose to trade NFTs and earn trading fees through liquidity pools. To do that, click “Your Pools” and then click “+ Create New Pool” to select one of the three options below. Sudoswap will guide you through the process, asking you to indicate how much ETH and how many NFTs you want to deposit and select a bonding curve to set up the liquidity pool. Once done, voila! You’re now one of the NFT liquidity providers on Sudoswap.
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