Rapture #232: SEC Sues Dragonchain and the Rise of SudoSwap
I am still mostly watching the market in anticipation of the next wave of volatility, which I think will happen shortly. Interestingly, the S&P 500 has continued to rally (now down only around 10% from its ATH) while the crypto rise has largely stalled out.
While I wait, I want to call attention to an interesting lawsuit and the hot new project in crypto.
SEC sues Dragonchain
Today, the SEC filed a civil suit against Dragonchain's founder, John Roets, for an allegedly unregistered securities offering that occurred in 2017. Specifically, the SEC claims that Dragonchain's ICO of the DRGN through a discounted presale to a crypto investment club and to the general public was an unregistered security offering.
The SEC is seeking permanent injunctions and the return of allegedly wrongfully obtained profits in addition to civil penalties.
The main takeaway here is that projects who performed ICOs as far back as 2017 still can't sleep soundly at night. Furthermore, the SEC has opted to pursue the civil route rather than the criminal, though I do believe that will change in the future with other projects.
SudoSwap
While the SEC lawsuit is interesting, right now everyone has been buzzing about SudoSwap. SudoSwap is a relatively new AMM based NFT marketplace. Specifically, SudoSwap utilizes customizable bonding curves based on the liquidity provided for a specific collection of NFTs. Bonding curves can be set by the pool creator to either be linear or exponential. If you would like to read more about the pool options, you can check out the sudoswap docs here.
Users can sell these NFT into that bonding curve or list the NFT for whatever price they choose.
Like other AMMs, users can provide liquidity (in this case NFTs and ETH) in order to earn trading fees for that specific pool.
SudoSwap also introduced a new swap order called a "robust swap". In contrast to a normal swap, a Robust Swap does a slippage check per swap pair rather than an aggregate check at the end. If the price for a specified swap pair is past the allowable slippage, the router will silently skip that route and move on to the next one, with no reverts or errors.
This is intended for situations where the price can move quickly between your transaction submission and execution.
Daily volume on SudoSwap has been on a parabolic rise since the beginning of October and now sits at nearly 1,200 ETH (around $2.2 million).
Daily users have also been steadily rising and now sit at 2,000. Nearly all users on SudoSwap daily are new.
Most of the major collections are yet to be listed on SudoSwap, but at least the CloneX collection is there.
While SudoSwap is definitely harder to utilize than marketplaces with centralized orderbooks like OpenSea, the ability for users to liquidity pool could lead to massive growth as it has for AMM based DEXs like Uniswap.
Personally, I don't think it will overtake the easier to use NFT marketplaces purely because the NFT user base is less techy than other areas of crypto, but I could be wrong and the data is nonetheless interesting.
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