Tracking Sudoswap marketplace activity with Nansen – Nansen | Jewelry Dukan

Sudoswap introduces a new way of conceptualizing NFT trades and transactions. Since its launch in July 2022, Sudoswap has experienced rapid growth.

TLDR:

  • As of July 2022, Sudoswap has processed 23.8k ETH (about $39.7M USD) in volume across 38.1k unique wallets. A total of 96.9k NFT transactions were enabled on Sudoswap.
  • Nansen data shows that there are currently 1,687 Sudoswap pools, although not all of them necessarily have had a sale.
  • The increase in the total value tied up in Sudoswap’s liquidity pool to $2.9 million in such a short span of time indicates its early popularity among NFT market participants.
  • In the first week of publication on July 9, Sudoswap’s volume accounted for 0.03% of the total market. After one month, this share increased by about 121 times at the end of August. Over a similar period, OpenSea saw its market volume dominance drop from 71.2% to 66.9%.
  • Although Sudoswap’s initial growth in August was undoubtedly exponential, market trend data on Sudoswap suggests that this trend may lose momentum in the short-term. However, this slowdown in transactions and users is in line with overall NFT market trends.

On Sudoswap, users can create open swaps where any market participant can view and interact with a specific wallet address and become an exclusive participant in an NFT trade. The protocol uses an open-source 0x protocol to create and settle swaps between any combination of ERC20, ERC721, ERC1155 tokens, or even a combination of all three, with NFT trades being able to settle ETH or WETH. Despite the recent hype and attention Sudoswap has garnered on Crypto Twitter, its concept of peer-to-peer NFT trading is not new. Before Sudoswap, we saw the launch of other similar platforms like NFTTrader and Swap.Kiwi.

What is Sudoswap Edge?

Put simply, each NFT listing on Sudoswap is its own pool, with the seller responsible for providing liquidity to those pools. This means users can set the NFT values ​​and other parameters for their pools, including selling the NFTs on a peg curve where it gradually increases as NFT pieces are settled.

One obvious benefit that Sudoswp offers is gas cost optimization as users only have to pay for asset permits and swaps. This feature distinguishes Sudoswap from OpenSea and other NFT marketplaces that require users to pay gas to create orders.

Sudoswap allows assets to remain in users’ wallets until both parties confirm a trade, facilitating a trusted transaction. To maintain trustlessness integrity, Sudoswap uses trade codes instead of users posting hyperlinks. This security feature implies that scammers are prevented from baiting unsuspecting users with deceptive hyperlinks. In order for a given trade to be sent to another party, the trade initiator must give a trade code to another party, who enters the code to complete the trade.

Because users can seamlessly purchase NFTs across different pools, faster and more efficient pricing of NFTs is encouraged. This arguably reduces the risk of traders and speculators being stuck with an illiquid NFT.

New challenges introduced by Sudoswap?

Sudoswap does not pay royalties to the creators of NFT trading. Such a practice differs from the current market leader OpenSea, which pays an average of 5% to NFT creators for resale of their NFTs (of which OpenSea charges 2.5% as a fee for its platform). Instead, Sudoswap charges a 0.5% fee on trades and sends those earnings to its treasury, not the creators. Such a practice could severely impact the revenue streams of NFT creators. Some critics, such as Punk #6529, have argued that “paying no royalties” is not a sustainable competitive advantage for Sudoswap.”

The platform’s low fees mean that it has become relatively attractive to NFT traders, especially those who trade at high frequencies. However, Sudoswap had also attracted potential wash trades (a similar trend was noticed with LooksRare when they originally opted not to charge for certain NFT collections). Since the launch of Sudoswap, Nansen’s wash trading filter has flagged about 3400 ETH worth of transactions on Sudoswap that are possible wash trades.

Market trends of Sudoswap

Since the official launch of Sudoswap in July 2022, market trends suggest that NFT market participants are welcoming how Sudoswap is disrupting the way NFTs are settled. As of July 2022, Sudoswap has processed a volume of 23.8k ETH (approximately $39.7M USD) involving 38.1k unique wallets. A total of 96.9k NFT transactions were enabled on Sudoswap. Furthermore, the increase in the total value tied up in Sudoswap’s liquidity pool to $2.9 million in such a short span of time indicates its early popularity among NFT market participants. Nansen data shows that there are currently 1687 Sudoswap pools, although not all of them necessarily have had a sale.

In the first week of publication on July 9, Sudoswap’s volume accounted for 0.001% of the total market. After one month, this proportion increased by a factor of around 3,200 at the end of August. In a similar period, if we consider the volume without imprint, the share of transaction volume of X2Y2 fell from 47.3% to 46.4%, the market volume of OpenSea from 36.0% to 33.9%, while the volume of LooksRare remained similar.

Although Sudoswap’s initial growth in August was undoubtedly exponential, market trend data on Sudoswap suggests that this trend may lose momentum in the short-term. However, this slowdown in transactions and users is in line with overall NFT market trends.

In the last week we have observed a slight plateau in the volume of Sudoswap; with a slight decrease in the number of users transacting on the platform. This may be due to the decline in first-time buyers trading on Sudoswap.

A possible explanation for this drop in first-time users could be the recent announcement of the SUDO token. Prior to the release of SUDO, new users are encouraged to use the platform in hopes of earning possible airdrops of the tokens. However, given the announcement of SUDO, speculative first-time adopters may no longer have the immediate incentive to switch to Sudoswap. It was announced that 41.9% of the initial 60 million SUDO supply will go to XMON owners.

Insights from Nansen dashboards show that 0xmon’s multi-sig treasury owns about 75% of XMON — a stake that doesn’t qualify for the lock drop. The top 10 single XMON holders collectively own 371.8 XMON, which is 3.7% of the XMON supply. We can speculate that these holders will likely be the biggest SUDO recipients depending on the amount of XMON they lock into the SUDO airdrop.

Final remarks

Sudoswap introduces a new way of conceptualizing NFT trades and transactions. Since its launch in July 2022, Sudoswap has experienced rapid growth. While the current transaction-related metrics point to a slowdown in growth, this trend is consistent with overall NFT market performance. However, it is still early to assess the magnitude of Sudoswap’s impact on the NFT ecosystem.

Disclaimer

The authors of this content and members of Nansen may participate in or invest in some of the protocols or tokens mentioned herein. The foregoing statement serves as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in tokens or participate in any protocol. Nansen does not recommend any particular approach to tokens or protocols. The content contained herein is for educational and informational purposes only and should not be construed as financial, investment, legal, tax, or any other professional or other advice. None of the content and information contained herein is presented to induce or attempt to induce any reader or other person to buy, sell or hold any Token or participate in any Protocol or enter into or offer any agreement for or with any with regard on buying or selling tokens or participating in a protocol. Statements made herein (including expressions of opinion, if any) are entirely general and are not tailored to reflect the personal needs and particular circumstances of any reader or other person. Readers are strongly advised to exercise caution and consider their own personal needs and circumstances before making any decision to buy or sell Tokens or participate in any Protocol. Observations and views expressed herein are subject to change by Nansen at any time without notice. Nansen shall not be liable for any loss or liability arising out of the use of or reliance on any such content.

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