Technology
Finance
Cryptocurrency
Blockchain
Decentralized Finance
NFTs
Blockchain Technology
Decentralization
why sudo?
this is going to be a bit long-winded, so bear with me.
gonna start from first principles. let's dive in 🫡🌊👉✨🧵🔥🆎🤯🫃
this is going to be a bit long-winded, so bear with me.
gonna start from first principles. let's dive in 🫡🌊👉✨🧵🔥🆎🤯🫃
Let's say that you're onboard with the idea that order books are still the best way to trade NFTs, but you want to build tech that's more decentralized than just an off-chain order book w/ on-chain settlement.
So you want all the normal features like listing assets, collection offers, auctions, etc, but the orders will live on-chain in some form.
Now, given that it's on-chain, you have room to be more expressive.
Say you look at some emergent behavior on existing order book marketplaces and try to see if you can also incorporate such preferences into the orders themselves.
Say you look at some emergent behavior on existing order book marketplaces and try to see if you can also incorporate such preferences into the orders themselves.
One thing that people do is make low-ball offers and then relist at closer to the floor, essentially playing the role of an elementary market maker. You can abstract this to create a conditional offer, allowing people to repurpose their buys or sells on the marketplace
For example, an order like "sell this item for 1 ETH, then reuse 0.9 ETH to bid on another item".
Another thing that people do is list their items in increasing tiers, e.g. the first one at 1 ETH, the next one at 1.1 ETH, etc. You can abstract this and create a conditional listing, allowing people to be agnostic about which item sells, as long as other items increase in price
For example, an order like "list all five of these items for 1 ETH, and then increase the price of the rest by 0.1 ETH each time one of them sells".
Order books are already moving towards enabling these sorts of functions (see e.g. looksrare or infinity with their conditional orders).
And that's precisely what's enabled (and more!) by the sudo architecture!
And that's precisely what's enabled (and more!) by the sudo architecture!
You can set up pools of ETH to buy NFTs, and then automatically re-list them.
You can set up pools of NFTs that automatically adjust their pricing as items get sold.
These orders can be discovered and filled by anyone listening on-chain.
You can set up pools of NFTs that automatically adjust their pricing as items get sold.
These orders can be discovered and filled by anyone listening on-chain.
Moreover (and more on this later), this is all done in a trust-minimized, gas-efficient way that allows for easy participation by other on-chain entities.
There has been a lot of focus specifically on the AMM aspect, which draws many parallels to existing liquidity solutions. I think this is more a symptom of how defi has a bias towards token<>token AMMs.
But sudo works fine even if there is no resting liquidity.
The degenerate case of single-item pools is when it "merely" devolves into an on-chain order book, the very same underlying model that is the benchmark for today's dominant markets.
The degenerate case of single-item pools is when it "merely" devolves into an on-chain order book, the very same underlying model that is the benchmark for today's dominant markets.
The efficiency gains of pools for bulk item operations is additive on top of this, not a necessity by any means.
There's a separate question, of course, about the degree to which illiquidity and improved ease of liquidity access can hamper price velocity.
This is a double-edged sword--finding a counterparty is harder, and velocity moves both ways.
This is a double-edged sword--finding a counterparty is harder, and velocity moves both ways.
But this is also a product-level discussion, not something that sudo as a protocol biases one way or another.
If you want something that pumps on sudo, e.g. just pick a large price delta.
If you want something that pumps on sudo, e.g. just pick a large price delta.
If anything, sudo lets you better coordinate listings with other participants trustlessly when it comes to pricing (e.g. imagine a staking contract that pays out to people who all list above some price floor) by virtua of it being on-chain.
I'm personally most interested in the composability aspect, and I think people just focusing on the AMM as a proxy for existing marketplaces are missing the forest for the trees.
In the two months since public launch, there's already been many glimmers of cool ways to build on top of the protocol, from rudimentary LP rewards to sudo-native minting to novel bonding curves to treasury buybacks.
I'll leave judgments about zero-to-oneness to the pundits, but I think it's hard to argue that if you want to deploy capital into NFT markets trustlessly, *at scale* today, there are few other options today besides sudo.
Especially if you have complex price preferences that you want to express.
Narrative-wise, I think the on-chain native approach sudo takes has the best shot of growing demand from large participants like protocols or funds that can't easily play in today's markets.
Want to incentivize demand for your project's token? Accumulate items directly from a governance contract? You can do all this and more with sudo as the base layer.
It's programmable liquidity, intentionally designed to be decentralized.
It's programmable liquidity, intentionally designed to be decentralized.
There is a large focus on marketplaces and floor liquidity today because the reality of the situation is that this is where most of the volume happens.
And if all sudo as a protocol did was innovate on the pricing dimension, then, yes, maybe it would be less remarkable.
And if all sudo as a protocol did was innovate on the pricing dimension, then, yes, maybe it would be less remarkable.
But sudo is seeing usage today while setting up viable threads to not only future-proof itself, but also bring about usages that can usher in the future of novel asset exchange.
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