Trading NFTs on Sudoswap for Beginners

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Recently, NFT protocol Sudoswap has been making headlines and seeing large increases in users. So much so, that its real volume (non-wash traded sales) has rivaled that of LooksRare, the NFT trading protocol.

But how does this affect you as an NFT trader? What even is Sudoswap? How can you use it? All of this will be addressed in this comprehensive introduction to Sudoswap. Let’s dive in.

What is Sudoswap?

Sudoswap is an efficient automated market maker (AMM) that facilitates swaps between NFTs (ERC-721s) and tokens (ETH or ERC20). In other words, you can trade your NFTs for tokens like ETH without ever needing to find a buyer or seller. This provides you instant liquidity as an NFT trader and makes trading NFTs similar to trading any regular token.

How Does Sudoswap Work?

Sudoswap uses a very similar model to Uniswap V2 by making use of customizable bonding curves. In order for trading to occur, first liquidity providers need to provide NFTs and tokens for trading.

An example of this would be by taking 10 NFTs from the same collection and 10 ETH and then putting them both into a liquidity pool. Traders could then trade ETH for that NFT or trade an NFT from that same collection for an amount of ETH.

The amount of ETH required to purchase an NFT in this pool or the amount you would receive for selling your NFT is predetermined by the liquidity pool’s creator. However, as long as there are available NFTs and ETH in the pool, you will be able to trade.

How Can NFT Traders Benefit?

Any NFT trader can benefit from Sudoswap. The main winner here, however, is anyone trying to sell an NFT. Sudoswap provides immediate liquidity for NFT traders, meaning that you will be able to exit your NFT position without waiting for a buyer.

The downside to this is that you do not get to choose your selling price. This will likely mean sacrificing some profit in return for an immediate sale.

The other downside is that Sudoswap is primarily used for selling floor price NFTs. Floor NFTs are the most common NFTs in a collection and do not have rare traits. This means that if you have a legendary NFT in a collection, you will not be able to sell it through Sudoswap’s NFT AMM and expect to get a reasonable price for it.

However, this may lead to some unique sniping opportunities for traders. When purchasing an NFT through Sudoswap, you get to choose which NFT from the liquidity pool you want to trade for. If someone mistakenly sells a rarer NFT, you will be able to selectively purchase it for the same price as a floor NFT.

Conclusion

Overall, Sudoswap is a unique and revolutionary protocol for the NFT ecosystem. NFT traders now have a way for immediate liquidity, something that has seemed difficult to achieve with NFTs. The protocol has already seen increased interest in the past week and we can expect to see even more interest over the coming weeks.