What is Sudoswap?
Over the past few years, we've witnessed the evolution of NFT trading. What started as exchanging cute kitty JPEGs has grown into massive NFT marketplaces such as OpenSea and Blur, where collectors can trade everything from artwork to digital real estate. However, as the NFT market continues to expand, the need for more efficient and decentralized trading platforms has become increasingly important. Sudoswap sets the standard for how decentralized NFT trading should be like.
Sudoswap has taken the NFT trading experience to the next level by providing a seamless and decentralized platform for collectors. Its automated aggregator feature allows users to easily discover and trade NFTs from various platforms, including OpenSea, Rarible, and SuperRare. By bringing together multiple marketplaces into one location, Sudoswap has simplified the NFT trading process, making it more accessible to a wider audience.
One of the most significant advantages of Sudoswap is its fully decentralized nature. Unlike other NFT marketplaces, Sudoswap doesn't require users to go through a KYC process, making it more inclusive and user-friendly. Furthermore, all transactions on Sudoswap are done on-chain, providing a higher level of transparency and security for buyers and sellers alike. The protocol is built on the Ethereum network and uses smart contracts to automate the trading process, eliminating the need for intermediaries and ensuring that trades are executed in a trustless and efficient manner.
Because listings on Sudoswap are permissionless, users have an incentive to be the first to create an NFT liquidity pool and collect fees in the process. The more NFTs added to the liquidity pool, the better the price stability. Furthermore, Sudoswap smart contracts have been optimized to consume as little gas as possible.
Sudoswap isn’t your average NFT marketplace. To explain Sudoswap, let’s recap how liquidity pools work.
A liquidity pool, is a smart contract that allows you to instantly swap between two assets. On Sudoswap, the most common type of pool is an NFT<>ETH pool, which means that anyone holding NFTs from that collection can instantly swap them for ETH, or vice versa.
Ideally, a pool contains some amount of both assets, enabling users to swap back and forth between them. However, it's also possible to create a pool with just one asset, meaning that users will only be able to buy that asset from the pool.
Due to the fact that Sudoswap runs entirely on smart contracts, there is always the risk that the platform gets hacked. Since Sudoswap launched in May 2022, the protocol has never been hacked. In addition to the strict security measures, Sudoswap is governed by the SUDO token holders. SUDO is a governance token that gives holders the right to decide the development direction of the platform. For example, shareholders can vote to adjust the fees, add new routers, and pool whitelisting of external contracts.
How does Sudoswap work?
Sudoswap can best be described as the Uniswap for NFTs. It is an automated market maker that facilitates NFT-to-token swaps (and vice versa) using customizable bonding curves. In a nuthsell, Sudoswap allows you to buy and sell NFTs from a liquidity pool instead of trading with other NFT holders.
The AMM model allows Sudoswap to quickly adjust prices based on market conditions, which can result in better price discovery for NFTs. This means that users can get a more accurate representation of the true value of the NFT they're trading, which can result in a more efficient market overall. Combined with the fee sharing model, liquidity providers have an incentive to create their own liquidity pools and make passive gains from the pool fees.
Sudoswap offers a high degree of customizability when it comes to creating your own liquidity pool. Specifically, Sudoswap lets users choose which bonding curve better fits their needs.
Pools use a bonding curve to determine the relative price at which one asset is traded for another. The more an asset is bought from the pool, the more expensive it becomes. Conversely, the more an asset is sold to the pool, the cheaper it becomes.
Sudoswap supports three types of bonding curve: linear, exponential, and XYK (constant product).
With a linear bonding curve, the price of an NFT is increased by a flat amount every time an item is bought from the pool. Conversely, the price of the NFT is decreased by that same flat amount every time an item is sold to the pool.
Let's say we have a liquidity pool for an NFT that has a total supply of 10,000 tokens. The bonding curve for this liquidity pool is linear, meaning that the price of the NFT will increase in a straight line as more tokens are purchased from the pool.
At the start of the bonding curve, the price of the NFT is set to $1 per token. If a user wants to purchase 100 tokens from the pool, they would pay $100. As a result, the price of the NFT would increase slightly, to $1.01 per token.
If another user comes along and wants to purchase 200 tokens from the pool, they would pay $201. The price of the NFT would then increase to $1.02 per token. This linear increase in price continues as more tokens are purchased from the pool, and so on.
With an exponential bonding curve, the price of the NFT increases at an accelerating rate as more tokens are purchased from the pool. This can create a greater sense of scarcity and urgency among buyers, which can drive up demand and increase the value of the NFT.
Let’s say we have a liquidity pool where the floor price is 2 ETH. After the next purchase, the price of the NFT can be designed to go up by 50%, resulting in 3 ETH per NFT for the 2nd bought item. After a second item is purchased, the price will increase to 4.5 ETH, and so on and so forth.
With an XYK curve, the price of an NFT is adjusted every time an item is bought from or sold to the pool, such that the product of two virtual reserves remains constant after every trade. These virtual reserves correspond to the number and value of NFTs the pool will buy or sell.
How to make money on Sudoswap?
In order to make money on Sudoswap, you will need to have at least one NFT. If the NFT appreciates in value, you can sell it on Sudoswap and get the best price.
For those of you with as sizable collection, you have the option to create a liquidity pool for your NFTs and receive the transaction fees from the pool. Liquidity pools can also be created with a single NFT, which essentially is a one-time transaction. Users with 10+ NFTs can benefit from the fees generated for a longer period.
There are three types of liquidity pools on SudoSwap — “Token”, “NFT”, and “Trade." Since we're on an NFT marketplace, let's see how you create the NFT pool.
Let's say you don't own a Redacted Remilio Babies with a beanie, but you want a have a Based Ghoul and several other NFTs. So, you create your own an NFT-selling pool for your needs.
You can then set up my pool to sell your first NFT for 10 ETH (“Start Price” = 10 ETH) and, for each sale, the price of the next NFT will increase by 0.1 ETH (“Delta” = 0.1 ETH”). This means that, if someone buys your first Based Ghoul, they’ll pay you 10 ETH. If they also want the second one, they’ll pay 10.1 ETH for that one. You could also make your delta “-0.5” or anything your mind cooks, and sell your second NFT for only 9.5 ETH. It’s up to you how you format your pool.
A natural question arises: how do people know to buy from my pool?
SudoSwap’s smart contracts do not automatically find you the cheapest pools to route your trades through. Instead, people will know to buy from your pool in 1 of 2 ways:
They want to buy your specific NFT, which can only come from your pool, so they’ll have to buy it from your pool.
They’re “sweeping the floor” — buying, say, 10 NFTs at once for the cheapest prices they can — and your pricing fits into the 10 cheapest NFTs for the collection. If so, SudoSwap (or an aggregator) will know this, as they track pricing across all pools in order to give users best pricing, and route part of the trade through your pool.
If you want to buy NFTs instead of selling them, you can create a pool for buying NFTs (called a Token pool) and fund it with ETH. You set the price at which to buy NFTs, and a delta for how much to adjust your quote price after each trade. You could offer 5 ETH for your first buy, and use a delta of -1 to offer 4 ETH for your next buy; very similar setup to the pool for selling NFTs.
Here’s how you create your own liquidity pool:
Open the Sudoswap app
To create a pool, start by navigating to the “Your Pools” tab at the top-right of the page
Click on "+ Create New Pool" and select your type of pool
Price Prediction for Sudoswap — Can it hit $1000?
Buying and hodling SUDO — the native token of the Sudoswap — is one way of potentially making money on Sudoswap.
By looking at its current price, it’s natural to think about the chance of SUDO hitting $1000 per token. This can happen sooner, or way in the future, and is determined by a couple of ever changing factors.
Let’s examine the potential growth of the SUDO token by analyzing its tokenomics. SUDO’s current market cap sits comfortably at ${MARKET_CAP}. With {CIRCULATING_SUPPLY} SUDO tokens being in circulation today, that means a price of {PRICE} per SUDO.
How did we come to that calculation? It’s quite easy, the price of a SUDO token is equal to its current market cap divided by the number of tokens in circulation. Dividing ${MARKET_CAP} by {CIRCULATING_SUPPLY} gives us a result of {PRICE} for each SUDO coin.
By changing the order in the simple formula above we can use it to calculate other things as well. This helps us a lot because we can deduce the market cap of SUDO at different token prices. Then, we can use the result to compare it to the current state of the network and see what would be required for SUDO to hit that price.
At a price of $1000 per token, that means the current market cap of SUDO would equal ${{CIRCULATING_SUPPLY} * 1000}. Remember that we arrived at this number by multiplying the amount of circulating tokens by $1000.
Now let’s shift our attention to the fully diluted market cap.
Some blockchains may have their tokenomics built in a way that only a small percentage of tokens are circulating at the beginning. This can be misleading because we don’t have the full picture and only take into account the current number of coins released in the market.
The fully diluted market cap represents the total value of a coin if all tokens were in circulation. SUDO’s whole supply of tokens is {MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} SUDO which means that no more coins above that number will ever be created.
These tokens are not created at the discretion of a specific entity. They are created automatically by the network to reward different actors that keep it secure.
How does this impact the price of SUDO? Taking into account the current price of a SUDO token, that would result in a fully diluted market cap of ${MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY * PRICE}. SUDO coins that have been burned are not taken into consideration because they have been permanently removed from circulation.
Whether it seems gigantic or not, the number we came to above only takes into account the current price of a SUDO token. Doing the same calculation but with a price of $1000 gives us a result of ${{MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} * 1000} for the SUDO protocol fully diluted market cap.
These are all crucial details to know when calculating if SUDO can reach the price of $1000 per token. If the diluted market capitalization is way too high, the token has little room left to grow. Blockchains in general have no cap on the value they can reach, whether that number seems possible it’s totally up to you.
The future of SUDO depends solely on its growth as a network used by tens and hundreds of millions of users.
If you’re looking to add some SUDO to your portfolio, the most trusted places to get some are Binance and Coinbase.
