Royalties have become a serious debate in the NFT market with creators raking in a good amount of money upon resale of their NFTs by current holders even after raising substantial amounts of money at mint events. This rush to milk the “new” cash cow has made the market filled with new collections and much more springing weekly. For traders, there’s the argument that NFT royalties reduce profitability. For example, an NFT worth 100 ETH with a royalty of 5% when sold will return 95 ETH to the seller while the creator takes 5%. This is aside from trading platform fees. But what if you could bypass paying that 5% (5ETH) and take home the 100 ETH less the insignificant platform fees? This is what Sudoswap offers and has brought to shake the NFT-Fi market. But what is Sudoswap?
Sudoswap is an efficient, automated market maker (AMM) protocol for trading NFTs and fungible tokens. Sudo enables an NFT-token and token-NFT transfer value. The AMM system is designed to facilitate NFT exchanges and allow LPs to provide liquidity. Sudoswap was launched in May 2022 by the developer of 0xmons, a human-AI hybrid NFT project of and/or animated monsters generated using generative adversarial networks. Sudoswap supports native ETH, ERC20 tokens, and ERC721 (NFT) assets. What this means is that users can trade and exchange NFTs and other Ethereum-based tokens on SudoSwap.
Features of SudoSwap
The key feature of Sudoswap is buying from and selling into existing NFT liquidity pools. SudoSwap provides an NFT marketplace where users may buy, sell, and trade one-of-a-kind digital assets on the Binance Smart Chain. It enables the trustless swapping of NFTs on the Ethereum blockchain and provides a variety of trading pairs that make it simple for traders to exchange tokens. Liquidity providers would get paid in return for contributing to the liquidity pools available on SudoSwap, and each pool comes with special benefits, which include;
Trading commission: With SudoSwap, liquidity providers (LPs) basically add to the pool of funds that traders can use to buy and sell tokens. They receive a percentage of the platform’s trading fees as a commission. LPs with greater liquidity will receive higher fees of the number of trading fees generated.
Participate in Governing Decisions: As a decentralized platform, users can acquire governance tokens, which allow them a say in crucial decisions about the platform’s development and direction, by lending liquidity to the platform. This involves voting on suggestions for additional functions, adjustments to the platform’s cost schedule, and other things.
Also, the integration of SudoSwap with the SudoBridge is another aspect that makes it stand out. The cross-chain bridge SudoBridge enables users to transfer assets between various blockchains, including Ethereum and BNB Chain. SudoSwap users can swap assets from other blockchains.
The NFT marketplace: The marketplace is accessed via the “NFT” tab on the main interface. The marketplace displays a variety of NFTs from various producers, each with its design and set of functions.
Minting of NFT: Minting an NFT entails producing a one-of-a-kind digital asset and putting it up for sale. Users can utilise the NFT minting tool to mint their own NFTs in addition to buying and selling them on the marketplace. Users can define the price, description, and other parameters when minting the NFT.
NFT Farming: SudoSwap also provides NFT farming, which entails staking SUDO tokens in exchange for incentives as a one-of-a-kind NFT.
SudoSwap DAO is a decentralized autonomous organization (DAO) controlled by its user community. Just like a DAO, Sudoswap DAOs are intended to let users make decisions and implement platform modifications without the need for a centralized authority such as changing the fee structure, adding or removing tokens, and implementing new features. These choices are determined through community voting, in which users with governance tokens can vote on significant proposals.
SudoSwap LPs can earn governance tokens, which allow them a say in crucial platform growth and direction choices. These tokens are used to vote on platform proposals and modifications, and the more tokens a user has, the more voting power they have.
How does it work?
Sudoswap is an NFT AMM protocol that enables the exchange of NFTs and allows users to act as liquidity providers. NFTs are traded via liquidity pools. Users can add NFTs or ETH to Sudoswap’s pools and can earn commissions from trades that occur through such pools.
Sudoswap offers three types of liquidity pools:
- Purchase-only pools (Buy pools)
- Pools that solely sell (Sell pools)
- Pools for buying and selling
In sudoswap, liquidity providers (LPs) can control the price changes that occur following a buy or sell within the pool (this is referred to as the “bonding curve”).
Bonding curve refers to a mathematical formula that defines how the price of NFTs changes after each sale or purchase. Sudoswap liquidity pools have bonding curves that are classified into two forms;
- Linear curves: As buys and sells occur, the price increases or drops linearly.
- Exponential curves: As buys and sales occur, the price rises or falls by a specific proportion.
Sellers can either sell their NFTs or list them on SudoSwap. They can sell their NFT directly to the bonding curve for the best price. SudoSwap also uses the AMM algorithm to decide the cost of tokens in the liquidity pool. The algorithm then requires a constant product formula to determine a token’s price based on its proportionate share of the pool’s overall liquidity. Every time an NFT is bought or sold, the price of another NFT changes algorithmically for the pool based on the selected bonding curve.
More about Sudoswap
SudoSwap offers a simple and user-friendly interface that is available via a web browser. The following is a breakdown of the technical features of the SudoSwap interface:
Connecting to the Interface: users must have a web3 wallet, such as MetaMask, or TrustWallet, to trade on SudoSwap.
Pairs for trading: the trading pairs are shown in a table format, with the token symbols, price, and trade volume all visible. Users can also use the search bar to look for specific tokens.
Price Table: SudoSwap also provides a price chart, which customers can use to examine the price changes of various trading pairs.
Order Form: Sudoswap features an order book, which displays the current orders made by users for a certain trading pair, The order book also contains details on the order type, price, and volume.
The SUDO Token: SudoSwap has a platform-native token, SUDO, which allows users to earn a portion of the exchange’s fees.
Conclusion
Sudoswap seems to replicate the familiar Uniswap experience for NFTs. It provides a platform for users to build and trade liquidity pools, which are containers for smart contracts made of NFTs and ETH.
SudoSwap charges a 0.3% fee for each trade. This fee is split between liquidity providers and SUDO token holders. Holding SUDO allows users to earn a share of the exchange’s fees.
Looking to the future, it appears likely that DEXs will continue to gain popularity as the DeFi—NFT ecosystem expands. We should expect to see the growing adoption of decentralized trading platforms as more people become aware of the benefits of DEXs. We should anticipate further innovation in the NFT-FI market, with new features and technologies created to enhance the user experience and increase liquidity.
Read also; Islamic Coin: what you should know about the Shariah-compliant crypto
