While we’ve all heard the well-known mantra that “bears are for market builders,” until very recently, it seemed that hardly anyone in crypto was making anything very interesting these days.
All NFT drops use the same old recycled concepts. DeFi still hasn’t recovered from it Luna PTSD, And to top it all off, tornado cash ban Do we wonder if the risks of building into DeFi are greater than we anticipated.
But when I was doing doomscrolling a few weeks ago, I finally found the excitement and freshness I was looking for. It started when I stumbled upon a spirited debate between crypto influencer Kobi and the entire population of NFT Twitter. Kobi inspired NFT collectors when he referred to NFTs as “altcoins with pictures”.
It is very simple. They are altcoins with pictures. Anything suggesting otherwise is larp and face.
— cobie (@cobie) 14 August 2022
As a low-jerk insult to many people I saw my . seen as a reset of overton window And a litmus test of my cognitive biases. It changed my perspective on NFTs. If you ignore all the nuances, and strictly consider smart contracts, altcoins with pictures What exactly are NFTs?
Sudoswap is the next new thing
That simple but provocative idea is part of why sudoswapwhich bus Governance token announced (SUDO), is fast becoming the “it” spot for NFTs these days.
Sudoswap launched in July—its name is a riff on Uniswap, which will become clear soon—and is the first, honest-to-god, decentralized NFT exchange with on-chain working decentralized NFTs. Automated Market Maker (AMM),
In other words, Sudoswap a . Is drafting, and as such it has to work in conjunction with other protocols. The liquidity provided through your AMM can be accessed by other protocols, dApps, and even marketplaces. In contrast, a huge NFT marketplace like OpenC is a closed ecosystem with a closed order book; Although customers provide liquidity, the platform has to charge transaction fees.
As always, removing the middleman is a big idea. While others have tried to solve the NFT liquidity problem, sudo—created by a pseudonymous team statelayer, 0xmons, 0x HamachiAnd bored genius– was the first to actually solve it. Platforms such as OpenSea and LookRare are marketplaces, but Sudoswap acts more like an exchange.
Sudoswap is the same for NFT as it is for Uniswap altcoins
The way I see it, Sudoswap is doing to the NFT space what Uniswap did to DeFi.
The reason why Uniswap was a big deal when it launched was because it charged fees typically held by centralized exchanges, and passed those fees to liquidity providers, which removed the need for traditional market makers.
In fact, I think it could be Be the spark that finally brings the excitement of 2020 defy summer To the NFT world. Call it NFT Autumn. One of the moments that turbocharged DeFi was when AMM created liquidity for trading altcoins. NFT Autumn may follow the same trajectory – but it is altcoins with pictures and AMMs.
Liquidity is an important financial building block, an essential element of any successful token (changeable or not). It is also a building block that was missing from the NFT ecosystem until the launch of sudo AMM. And a small part of Sudoswap’s SUDO supply will be Distributed to people providing liquidity For the platform in the past (a la Uniswap), a move that could attract more liquidity to Sudoswap and its AMM as it would attract speculators.
thorny royalty question
This is not to say that Sudoswap’s ascension to heaven is certain. community trampled by an argument About another feature of the market—namely royalty. It has been a practice until now for some marketplaces to allow creators to charge royalties (up to 10% in some cases) whenever their NFTs change hands on that marketplace. In fact, this is one of the things that made crypto so exciting to creators—theoretically, as long as there are new buyers for their art, they get paid forever.
Sudoswap nixed royalty. Instead, the protocol charges a 0.5% “trading fee” and allows NFT collectors to trade fairly cheaply.
Statelayer (one of the sudoswap founders) told me that he and his team are not surprised by the response regarding royalties. The real surprise (in the beginning) was the producers who came to the stage specifically to create their projects.
“We didn’t expect it,” Statlayer said.
Why Sudoswap may be better for creators than royalties
It turns out that the profit for the producer is that they become the artist, the seller and broker, if they do it right. In other words, the artist can act as an entrepreneur, start their project on sudo, infuse liquidity, and charge trading fees from the pool. This can be a higher amount than what is possible in a traditional NFT sale.
The most successful collection ever to attempt this approach was Sudonatas, by brentskeit, By launching through sudo’s AMM, every sale of sudonot nft added liquidity to the pool, making it more liquid, and dare I say it, a less volatile market. This is great for collectors, assuring them that there will always be a buyer for their Sudonat.
The sudonuts project is only two weeks old. But the results so far are encouraging. Yes, its current minimum price is 0.23 ETH, but it generated 563 ETH selling volume. And this gave the artist a neat 40 ETH in trading fees from his liquidity pool. He also retained 200 NFTs out of 2000 for himself and his team to “demonstrate how artists can leverage while providing deep liquidity for their collections.”
590,000$ now. Has liquidity of $315,000 to support NFT collections with circulating MCs of
Liquidity is basically off (on 2/2 Multisig w/ Matty&I)
It will be interesting to see how this collection affects this liquidity
Think Is Most Liquid NXT Collection RN AAAA
— Brent (@Brentsketit) 17 August 2022
The collection has a total market cap of $590,000 – and is now supported by $315,000 of liquidity. At the same time, it is helping to create a safe and healthy marketplace for its collectors, with a system that is designed for longevity rather than promotion.
Brentschmidt described the experiment as a “definitely viable” alternative to royalties, though he told me it “needs to be made easier to use.”
Another daring explorer to delve into the depths of sudoswap is John Patton, CEO Treasury DAO, recently published by john blog post Outline of an upcoming NFT project called DAO Cats Which is planning to launch via SudoAMM. DAO Cats refers to itself as “an experiment in DAO-owned IP”, but I’m most interested in its plans for “protocol-owned liquidity”. They are locking 40% of the total supply of Cats and Catcoin (a token that NFT holders can obtain by depositing their Cat NFTs into the DAOs Vault) in a liquidity pool, which can only be withdrawn if holders choose to do so. vote for.
John’s goal with DAO Cats is to “create an NFT where lots of supply is withheld by the protocol to provide liquidity, and hopefully create a more reliable floor price.”
“Altcoins with Pictures” is a Feature, Not a Bug
I believe that sooner or later, creators will understand that “NFTs are just altcoins with pictures” is a perfectly reasonable summation – and that is okay.
I am not trying to troll NFT collectors. Seeing NFTs in this framing opened a whole range of new possibilities for NFTs in my mind.
I end with a question: If you could go back in time before DeFi Summer, knowing now that you know what works and what doesn’t, what would you make? Answer that question, then go and build it—but add pictures.