What is Sudoswap?

Sudoswap is an NFT automated market maker (AMM) protocol on the EVM (Ethereum and some of its L2s). It enables the creation of liquidity pools (LPs) for NFTs.

Why would I want to create an NFT LP on Sudoswap?

LPs enable market participants to have confidence in their ability to participate in the market as "takers" (those who trade against standing orders), rather than only being forced to transact as "makers" (listing their assets and waiting for a taker). For many larger market participants, this is critical functionality.

You as a creator will want to know how Sudoswap works and why you should encourage your collectors to use it in trading. Especially as Sudoswap, unlike other NFTAMMs like NFTX, provide royalties paid to creators of collections.

There are other benefits to LPs, however, this article is not intended to serve as an in-depth course on LPs or even Sudoswap itself, but to be a gentle introduction into the subject. For more complete details, we recommend reviewing the Sudoswap docs.

Creating an LP for an NFT

For your convenience, we'll cover here the major steps in creating an LP on Sudoswap. However, please also review the Sudoswap docs on creating pools.

Browse to https://sudoswap.xyz/#/create.
Select the NFT you want to create a pool for.
Select the type of pool you want to create. In most cases, this will be a "trade" pool (enabling both buy and sell transactions). You likely want to create an ETH/NFT pool, although it's possible to use any ERC-20.
Select the price curve and parameters you'd like to use for your pool. Optimizing these parameters is beyond the scope of this guide.
Approve TX and deploy.

You can create LPs for ERC-721 NFTs as well as ERC-1155 tokens!

Example of ERC-721 LPs: https://sudoswap.xyz/#/browse/base/buy/0xee7d1b184be8185adc7052635329152a4d0cdefa

Example of ERC-1155 LPs: https://sudoswap.xyz/#/browse/base/buy/0x15c46accd7975c11f155ae6604e22c3925d1d79a

What if I need to change something?

You can adjust the parameters (price, delta, swap fee) of your pool on Sudoswap via https://sudoswap.xyz/#/pool.

Will I get LP tokens?

No. Sudoswap does not use LP tokens to represent your holdings:

This is because every liquidity pool has a unique smart contract associated with and owned by its creator.

All assets pertaining to a pool are held in the pool's smart contract, so there is no need for additional tokens to keep track of deposits.

Will I lose my ETH/NFTs?

Please review how an LP works. Based on how other users interact with your LP, as well as how you configured it, it's possible that others may buy or sell in quantities enough to significantly change the balance of the pool.

That is to say: if you create a pool with ETH and NFTs, and users only buy NFTs from the pool (never selling into it), soon there will be no NFTs left and a lot of ETH. The opposite can also happen.

The specific NFTs you deposit to the pool may be lost as they are free for anyone else to buy. You should treat depositing NFTs into a pool similarly to listing them on a marketplace - they become immediately able for trade.