What Is Sudoswap And What Makes It Different Compared To Other NFT Marketplaces
We end it on a high note where we talk about NFT Royalties for creators
We have previously covered Windvane NFT Marketplace, Coinbase NT Marketplace (and why it sucks), so we thought it would be a good idea to cover Sudoswap NFT Marketplace this time and give more insights on what makes it different compared to other existing marketplaces.
Like we have explained it previously, trading NFTs can be way more challenging than trading crypto tokens (i.e ETH, BTC). The reason for that is because when trading with crypto, you always (almost always) have a buyer on the other side who is willing to buy your crypto through an exchange. Considering the nature of crypto and being fungible tokens, it means they can easily be exchanged for another crypto token so the liquidity is always out there.
While for NFT (Non-fungible tokens), that is not the case . They are unique in nature and as such, can’t be exchanged nor can be sold easily. There has to be a buyer on the other side who is specifically looking for your NFT in order for you to be able to sell it.
*drum roll please*
Sudoswap is about to change that. Sudoswap is a decentralized NFT marketplace that operates on Ethereum blockchain. It serves more like an exchange and not just a marketplace like OpenSea, Rarible or other marketplaces.
Sudoswap is the “Uniswap” for NFTs. What Uniswap did for altcoins, Sudoswap is doing it for NFTs. On Sudoswap, you can buy and sell NFTs through their liquidity pools. Now, everyone can deposit NFTs or ETH on Sudoswap’s pools and earn fees from the trades.
How are they doing this? Well, they are applying something called an AMM (Auto market maker) model to NFT Trading. If you don’t know what a market maker means, be sure to read our previous article on the same concept.
They are using an automated model of market making technology which is used from DEX (Decentralized Exchanges). Instead of you waiting for another counterpart to buy your NFT, you trade against liquidity pools which serves as counterpart in this case. In the case of Sudoswap, everyone can act as a liquidity provider by creating their own liquidity pools. Why would someone be interested to take part in LPs someone may ask? Well, by doing so you will be able to collect trading fees when transaction happens.
To summarize the benefits of the Sudoswap NFT Marketplace:
- immediate liquidity. — the ability to sell your NFT quickly, something which is not an option in other NFT marketplaces,
- fully decentralized. — Sudoswap is fully on blockchain, while OpenSea or other platforms are not fully decentralized like you will see later on with the case of royalty fees. Meaning that, even if Sudoswap is down, there will always be alternatives and proxy websites from which you will be able to access the marketplace,
- less fees. — Sudoswap takes 0.5% from each transaction while OpenSea take 2.5% plus the creator fees.
Stats about Sudoswap
Any drawbacks on the Sudoswap marketplace?
If you have a rare NFT then Sudoswap probably won’t make you happy with the price you’ll get for your NFT. Sudoswap uses an AMM protocol which makes no distinction between different ERC721 (btw, ERC721 is the standard for NFTs) IDs. Meaning that when doing trading it does not take into consideration any attributes which make your NFT more rare than the others. All of those that come from a specific project are treated the same (it does not matter if your BAYC is the 10th rarest from 10k collection).
Anything else?
There is a general misconception about NFT royalty fees. Most of the people think that those royalty fees are applicable on smart contracts when in fact they are applied at a marketplace level, meaning OpenSea allow NFT creators to apply a certain percentage (5–10% of the purchase price) as a royalty fee so every time when a trade happens, the creator gets the fee. This was meant to be a fee to support creators even if a trade happens on secondary markets after the initial sale.
In the case of Sudoswap, there are no royalty fees, meaning that the creator does not get anything in return from the trade. All those fees go to the liquidity providers, which gives them an incentive to offer liquidity on the platform.
Few NFT enthusiasts are not really happy about it as they consider that the whole point of NFTs was meant to be a way to reward creators lifetime.
Our thoughts on the royalty fees
Until royalty fees are applied in smart contracts in blockchain level, there will always be alternatives like Sudoswap or other DEX apps which will try to avoid such royalties and rewards their LPs instead. Web3 space is relatively new and hopefully soon we will be able ti implement those royalty fees on blockchain and then no matter what platform it trades, creators will always be rewarded.
In fact some creators have abused with creator fees where they applied a 5% royalty fees initially and later one changed it to 10%. A royalty fee should be set in stone, whatever the initial royalty fees is, it should be set for the lifetime of the project.
