While we’ve all heard the well-worn adage that “bad markets are for builders,” until lately, it seemed like no one in crypto was constructing anything particularly noteworthy.
Forget DeFi Summer: NFT Autumn is here.
The same old rehashed principles have been employed in all of the NFT drops. DeFi is still suffering from Luna PTSD. To top it all off, the Tornado Cash sanctions have us wondering if the risks of building in DeFi are higher than we previously thought.
But a few weeks ago, while doomscrolling, I finally got the exhilaration and the brand new thing I’d been seeking for. It all started when I stumbled upon a heated conversation between crypto influencer Cobie and what appeared to be the whole population of NFT Twitter. When Cobie referred to NFTs as “altcoins with images,” he ignited NFT enthusiasts.
Sudoswap is the latest craze.
Sudoswap, which just introduced a governance token (SUDO), is swiftly becoming the “it” location for NFTs these days, thanks in part to that simple yet controversial notion.
Sudoswap debuted in July—its name is a play on Uniswap for reasons that will become clear later—and it’s the first real-world, operational decentralized NFT exchange with an on-chain automated market maker (AMM).
In other words, Sudoswap is a protocol that should be used in combination with other protocols. Other protocols, dapps, and even markets can access the liquidity it offers through its AMM. A big NFT marketplace, such as OpenSea, on the other hand, is a closed environment with a closed order book; although clients offer liquidity, the platform gets to keep transaction fees.
As always, eliminating the middleman is a big idea. Though others attempted to overcome the NFT liquidity problem, Sudo, developed by the pseudonymous team of Statelayer, 0xmons, 0xHamachi, and boredGenius, was the first to achieve it. Marketplaces such as OpenSea and LooksRare exist, but Sudoswap functions more like an exchange.
Sudoswap is the NFT equivalent of Uniswap for altcoins.
Sudoswap, in my opinion, is doing for the NFT sector what Uniswap did for DeFi.
Uniswap was a significant deal when it first began because it took the fees normally maintained by centralized exchanges and transferred them to liquidity providers, eliminating the need for traditional market makers.
Indeed, I believe this might be the spark that ignites the enthusiasm of 2020’s DeFi Summer in the NFT globe. Autumn, call it NFT. When AMMs offered liquidity for trading cryptocurrencies, it was one of the occasions that accelerated DeFi. NFT Autumn may take a similar path, but it’s altcoins with photos and AMMs.
Liquidity is a critical financial building block and a required component of every successful coin (fungible or not). It was also a missing building piece in the NFT ecosystem until Sudo’s AMM emerged. In addition, a tiny amount of Sudoswap’s SUDO supply will be donated to users who have previously supplied liquidity for the platform (a la Uniswap),a step that may attract greater liquidity to Sudoswap and its AMM by luring speculators
“Altcoins with images” is a benefit, not a flaw.
I believe that sooner or later, creators will realize that “NFTs are just cryptocurrencies with images” is a totally reasonable summary—and that’s OK.
I’m not attempting to annoy NFT collectors. Seeing NFTs in this context opened up a whole new world of NFT possibilities for me.
I’ll close with a question: What would you develop if you could go back in time before DeFi Summer, knowing what worked and what didn’t? Answer that question, then construct it—but provide images.