Sudoswap: Where DeFi Innovation Meets NFT Markets

Introduction

The epicenter of NFT trading primarily resides in highly centralized marketplaces such as OpenSea, which feature creator empowerment, order book listings, and stacked fees. Trading has centered around benefitting creators, resulting in marketplaces subjugating traders, who have subpar experiences. Traders are forced to search for cheaper services but settle for orderbooks with dispersed liquidity. In such an environment, what are the implications of introducing an on-chain AMM-based marketplace that aims to cater to all parties?

Unless you’re completely unfamiliar with the NFT marketplace, reading this so far should lead you to one project: Sudoswap. This post will look at Sudoswap’s traction, capital efficiency, and other important metrics.

1. Sudoswap Analysis

1.1 XMON vs. SUDO Valuation

XMON is the ecosystem token for 0xmons digital collectibles on Ethereum. The 0xmons project has teased an airdrop of SUDO for XMON holders, which has sparked speculation around the token. You can read more about the SUDO distribution here.

XMON significantly outperformed the entire market in recent months. Since the Jun. 2022 bottom of $3,041, XMON surged 1,484%, peaking at $48,184 in Aug. 2022, catalyzed by the launch of Sudoswap in early July. Market-wide weakness saw XMON price drop towards late August, but the announcement of SUDO tokenomics in early September resulted in its price rising 53% in a single day.

Currently, XMON holders own 25.1% of the supply, with the rest held in a multi-sig wallet. The SUDO distribution will allocate 41.9% of its entire supply to XMON holders participating in the lockdrop event. Thus, the lockdrop will increase XMON stakers’ holdings by 67%, which explains the dramatic surge in price.

Even as speculation ended with the SUDO token announcement, it makes sense why XMON failed to bridge the theoretical discount disparity. The discount factors in a three-month lockdrop where the token is non-transferrable amidst the most uncertain macro conditions in over a decade. Furthermore, we could see competitors spawn and attempt to vampire attack Sudoswap with high, hyper-inflationary token reward