The latest development is the deployment of an automated market maker (AMM) called sudoAMM, which is specifically designed for NFT trading. It’s slated for Ethereum’s mainnet and is designed to be a piece of infrastructure for other NFT projects.
“We’re testing in prod atm for the [user interface]” 0xmon, the project’s co-founder, told The Defiant. The pseudonymous developer posted a transaction on Twitter, which used the contract deployed on April 24. Once testing on mainnet is done and the smart contract verified, the public will be able to access sudoAMM.
Gem, an NFT aggregator which OpenSea acquired this week, has already integrated sudoAMM’s contracts, according to the aggregator’s lead developer who goes by Vasa.
SudoAMM allows users to deposit either ETH, NFTs of a certain collection, or both, with a custom bonding curve. This lets users set up limit orders for by deploying ETH into a pool with an on-chain commitment to buy NFTs of a specific collection at a chosen price.
Likewise, users will be able to deposit NFTs of a selected collection, sell the tokens at a fixed price, or with a bonding curve. That’s a mathematical feature that raises the price of each subsequent purchase.
0xmon outlined the basic model for sudoAMM in more depth in a blog post. The co-founder likened sudoAMM to Uniswap V3 in that it allows liquidity to be deposited in custom price ranges.
SudoAMM will allow whole NFTs to be traded, meaning that only NFT “whales” will be able to provide significant liquidity by themselves. Still, sudoAMM is designed to be permissionless, meaning that developers can build on top of its smart contracts and potentially aggregate individual pools of an NFT collection into a larger one.
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This gets at a key element of sudoAMM — the protocol is likely to be used as infrastructure for other NFT projects. CometShock, a writer and frequent DeFi commentator, gave The Defiant the example of Yuga Labs, the company behind Bored Ape Yacht Club, deploying a marketplace specifically for its NFTs.
“The official BAYC marketplace could even have some fancy branding and be closed source to prevent social engineers from forking and scamming,” CometShock said.
The writer also thinks that, given deep enough liquidity, sudoAMM will permit more precise pricing of NFTs. This in turn could allow people to borrow against their NFTs, thus financialization.
No project has truly established itself as the go-to solution for NFT collateralization because the token’s non-fungible nature makes them difficult to price, and borrow against.