Making NFT transactions cheaper through aggregation, collateralization, and tokenization.

With the emergence of competitors to Opensea, various new product types have appeared to enhance the efficiency of NFT trading - NFT trading aggregators and Swap Marketplace.

Oct. 2022, Vincy, Data Source: Footprint Analytics - NFT Marketplaces

If you want to buy or sell NFTs, you have nearly a dozen mainstream options today. To outsiders, they all look the same, with main pages filled with square cartoon characters.

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However, from standard trading markets (OpenSea, X2Y2, LooksRare) to models attempting to lower NFT transaction costs through innovative solutions, the evolution is ongoing. In this article, we will explain three main emerging technologies: aggregation, collateralization, and tokenization.

What are General and Art Marketplaces?

The General Marketplace is a platform for selling various NFTs. The Art Marketplace features curated artists and collections. Unlike a general marketplace where anything can happen, the art market uses curation to provide the aesthetic appeal needed for their platform.

Many NFT trading platforms allow trader A to list their assets at a specific price. When trader B is willing to pay that price, the transaction takes place. This behavior, known as "fixed price," is used by platforms like OpenSea, LooksRare, X2Y2, and SuperRare.

Another method is auction-style bidding where buyers compete with each other, similar to traditional auction markets, and the highest bidder gets the NFT asset. OpenSea is an example of this type of marketplace.

In both cases, buyers have to pay Gas fees for the transaction, and the lack of liquidity makes NFT trading inefficient.

What is an NFT Aggregator?

A longstanding issue in the NFT market is spending too much time and gas purchasing multiple NFTs.

Leading trading platform OpenSea is not lagging behind the rapid development trends in the NFT market. On October 5th, it announced formal support for batch listing and purchasing, allowing users to list and buy up to 30 items in a single transaction on OpenSea.

Data shows that despite OpenSea integrating bulk purchases from single collections, making life easier for less active traders, serious NFT traders still find it cumbersome (and costly) to trade across all these different markets.

The GEM and Genie markets are new platforms that aggregate multiple markets. Users no longer need to compare prices on different sites but can consolidate all data in one place and make purchases in one location. This allows NFT enthusiasts to save time and money (Gas fees) when buying various items.

Additionally, in terms of payment, Genie currently supports ETH payments, while GEM accepts all ERC-20 tokens as payment. It allows users to make a single payment using a variety of selected tokens.

What is an AMM NFT Market?

Sudoswap is a decentralized on-chain NFT exchange using the AMM model.

In DeFi, AMM (Automated Market Maker) refers to a decentralized asset trading pool that allows users to seamlessly trade cryptocurrencies with their liquidity.

AMM operates differently from traditional order book trading models; in AMM, both parties to the trade interact with the on-chain liquidity asset pool. The liquidity pool enables users to switch between tokens on-chain in a completely decentralized and non-custodial manner. Liquidity providers (LPs) earn passive income from trading fees based on the percentage of their contribution to the asset pool.

• Users can buy or sell from different pools of NFT collections
• Pools can buy or sell to different users
• Users can create liquidity pools for NFTs in the same collection with ETH

What is NFTX?

NFTX allows users to collateralize and tokenize their NFTs, aiming to solve liquidity issues in the NFT market. It creates a platform for trading ERC-20 tokens. An NFT holder can move their digital assets into a vault, minting replaceable tokens (vTokens) representing the NFT value. For instance, minting a corresponding CryptoPunk vToken for a CryptoPunk NFT.

When users sell NFTs on NFTX, it's akin to minting an ERC-20 token and paying a 10% minting fee, which can then be exchanged for ETH on SushiSwap. Since tokens are fungible, NFTX's pools have sufficient liquidity. To remove an NFT from the vault, users must deposit replaceable vTokens.

Importantly, users can easily swap their NFTX tokens for another on a DEX, bypassing the longer and more expensive process of trading one NFT for another in the market.

Conclusion

NFTs are blockchain tokens but with a twist—lacking liquidity and inefficient trading. Several new NFT market models have emerged to address this issue and streamline the process of trading NFTs.

This article is contributed by the Footprint Analytics community