NFTs, the big winner of the 2021 bull market, have been in a slump in 2022.
It’s been ugly regardless of which metric you look at. USD volume, number of buyers and sellers, and transaction count are all way down from their previous highs.
Thankfully, it looks like help might be on the way. SudoSwap, a new project that is making waves on Crypto Twitter, looks to completely revolutionize how NFT marketplaces function.
Previous NFT Marketplaces
For those who aren’t well-versed in ridiculously valuable JPEGs, NFTs are traded on marketplaces, which are exchanges for NFTs.
Historically, all NFT marketplaces, including kingpin OpenSea, used a centralized off-chain orderbook. Sellers would list their NFT, it would be stored in an orderbook by OpenSea, and then buyers would browse this orderbook.
This works decently enough but contains three key weaknesses:
- There is a central point of failure
- Liquidity is fractured and poor, leaving ambiguity over how much NFTs are actually worth
- Sellers have to manually list each NFT they own
SudoSwap’s unique design addresses all three of these issues.
An NFT AMM
Instead of an off-chain orderbook, SudoSwap uses an Automated Market Maker (AMM). This means that instead of having an orderbook brochure of orders, each collection on SudoSwap has its own liquidity pool containing the NFTs and ETH.
This design has several advantages over traditional orderbook marketplaces:
- Users can trade with this liquidity pool at any time to instantly buy and sell NFTs. No longer do you have to wait for offers
- Liquidity is unified for each NFT collection, as each has its own liquidity pool
- Users can provide liquidity to earn trading fees
- Sellers can list as many NFTs as they want at one time
A Big Opportunity
Many of you probably don’t care too much about NFTs. That is fair, as they are a difficult concept to wrap your mind around.
However, it is undeniable that NFTs are a huge market and are the vertical of crypto that has most appealed to the average Joe. There has been almost $70 billion of secondary NFT sales even though NFTs are just altcoins with pictures in their current state. The opportunity here is massive.
Dominant marketplace OpenSea, valued at $13 billion earlier this year, is a bonafide goliath. However, they are not invincible. They have real drawbacks, and SudoSwap appears to address them.
With how big the NFT market is, if SudoSwap can somehow cut into OpenSea’s dominance, you are looking at a very valuable project. With a token on the way, SudoSwap is definitely something you want to keep your eye on.