About the editor: Spencer Noon is Co-founder & General Partner at Variant Fund. Web3 founder looking to connect? Reply back to this email.

Coverage on Sudoswap, Reservoir, and Flow.

Sudoswap is an NFT marketplace which uses a novel mechanism of an AMM protocol to transact and trade NFTs. Users can create pools of NFTs, tokens, or both to facilitate the trade of NFTs in a similar fashion to DeFi protocols such as Uniswap.

Sudoswap launched during the slowdown in the NFT market, which began in Q1 of this year and affected all marketplaces across the ecosystem. Despite this, many metrics have now stabilized with some starting to show signs of growth again. New pool creations are on the rise, which increases the liquidity that is available to users of the protocol.

• Since the last OurNetwork post about 2 months ago, the lifetime pool fees paid to LPs have increased by 50% reaching $2.1m earned in the 5 months since launch. Profitability of LPing is a topic that has been getting a lot of attention lately. Looking into trade pools (pools that can both buy and sell NFTs) with at least a single trade, we see that 62% of the created pools have positive real profit in ETH, meaning that the majority of pools are yielding profit to their LPs!

• Looking for more Sudoswap coverage? Insight #3 is available exclusively in our Members Club:

• Bids have played an increasingly important role in the NFT market over the last year. In January of 2022, 2.8% of all NFT volume was from filled bids, while in November, that number increased to 28%. Last month, bids accounted for 15.9% of all sales, and 19.6% all unique users had at least 1 bid filled.

• Increased bid acceptance may be a function of market conditions, but technical advances in NFT bidding also contribute. The introduction of collection bids by LooksRare in early 2022 and OpenSea mid 2022, as well as novel liquidity supply innovations like Sudoswap, increase NFT liquidity provision.

• Bid-ask spreads are improving rapidly. Today, the median fee adjusted spread across the top 500 collections is 15.9%, with 31 of the top 100 having a spread less than 5%. As bids improve, expect instant selling to become a dominant market behavior. Check out your top bids at instantsell.io.

• The Flow blockchain is purpose-built for NFTs and digital collectibles. Many NFT degens found their way into Web3 via NBA TopShot, Dapper Lab’s most successful NFT project. With the release of NFL All Day, La Liga Golazos, and other high-profile projects, Flow continues to slowly take market share from the leading L1s for NFTs: Ethereum and Solana. In terms of raw transactions, Flow’s 12.7m transactions since the beginning of 2022 makes up 25.6% of the overall NFT market among the giants.