@Uniswap, but for nfts: SudoSwap

Here's how @sudoswap works 🧵:

First, the need.

People like trading. People will trade anything, nfts are no exception.

Build and they'll come.

Other attempts : fractionalization.

• This basically turns 1 nft, into many fungible tokens.
• But the process is pretty complex and expensive (gas) to use with AMMs like Uniswap.

This is basically a hack which enables interoperability with existing pricing models.

Enter LSSVM.

• LSSVM is not a single amm for nfts.
• Rather, it's a protocol for creating nft amms.

• Instead of dealing with fungible fractions of nfts, lssvm requires traders to exchange whole nfts.
• And, instead of x * y = k, this allows for arbitrary bonding curves.

Here's how it works:

• The LSSVM consists of many individual pools of nfts.

• Each pool is created by a liquidity provider, who sets the bonding curve (kinda like how x * y = k is in uniswap)

• Traders can pick a pool (or use an aggregator to trade with multiple).

The Pools.

• There are several types of liquidity pools: buy only, sell only, or both.

For eg: a buy-only pool contains ETH and is always ready to give a quote to buy NFTs with its ETH.

• You essentially trade your coins (or nfts) for the nfts (or coins) in the pool.

How are the prices determined

• The quote is determined by the curve set during pool creation.
• Any curve can be implemented, but at launch only constant, linear, exponential curves are available.

The end result is, for each nft collection, we end up with some number of pools, each with their own floor and bonding curve.

This makes sense as different users may want different floor price and bonding curve parameters for different nfts.

SudoSwap as a nft amm is a good way to think about it.

• It makes some tradeoffs. As everything is on-chain, gas is naturally higher.
• But it has benefits in terms of decentralization and programmability.

It may also seem complex to new users, compared to smth like OpenSea.

SudoSwap also doesn’t include royalty fees in their trades.

This is has sparked some debate within the community.

There are some workarounds for this. The collection can run deploy their own pool and earn LP fees.

I don’t have a strong opinion here, and don't know much about how royalty is actually implemented, to weigh in.

Here are some other links diving deep into the protocol.

• @bh359 's post: https://bheau.substack.com/p/sudoswap-the-nft-amm-explained

• @0xmons (the creator's) blog post about it: https://blog.0xmons.xyz/83017366310

• The litepaper: https://0xmons.xyz/assets/nftamm.pdf

Thanks for reading this thread. I hope you learned something new.

If you enjoyed this, you might like my thread on @LensProtocol: 

https://twitter.com/_yashKarthik/status/1552865366644207617

SudoSwap: Uniswap but for NFTs

Today @jackbutcher has over 500k followers on the internet, earns $100,000 a month, and runs an infinitely scalable business.

Just 4 years ago, in 2018, he was burnt out running an ad agency serving corporate clients.

A thread about Jack's journey productizing himself 🧵:

He started down the standard career path.

Studying design at university and working in the design industry.

He spent a decade working as a creative director for several Fortune 500 companies.

Bouncing around different jobs, picking up new skills, building new connections.

In 2018, he started his own advertising agency.

Shooting videos, commercials, and full-stack creative work.

Serving corporate clients as a single-person agency turned out to be super exhausting and he was feeling burnt out by the end of the year.

While working on his agency he noticed that clients weren't coming to him for his skill-set.

There was no reason to choose him over another agency specialising in (say) video ads.

He had built up a strong network while working at his previous jobs

His new agency was getting business from the connections he developed at his prev agencies.

He quickly understood that this wouldn't be sustainable and he had to either scale up or pivot.

1. He could hire either some designers, managers and scale his agency to handle corporate clients; or,

2. Pivot the agency in one specific, narrow direction to eliminate competition.

He chose to dig in and focus on a very specific part of the ad process : pitch decks.

A pitch deck is essentially a sort of presentation used to introduce and communicate an idea to win a job or contract.

It itself is (usually) not the product.

But he had spent so much time refining that process, he built a brand around that as a product.

As a graphic designer, he had to compete in a massive market against a massive pool of other designers.

But layering his skill as a graphic designer with his expertise for understanding and communicating value, he created a whole new market with no competition.

To advertise his skills and services, he started posting on social media (@visualizevalue) and over time the number of requests became too great.

"Now I spend all of my time making things that make it easier to learn, teach, build, and sell."

Thanks for reading this thread. I hope you learned something new.

Checkout @visualizevalue for some wisdom.

If you enjoyed this thread, you might like my thread on wordle:
https://twitter.com/_yashKarthik/status/1501767340538556423?s=20&t=Bk1B8fBmwK1urDBlC_ocXw

How Jack Butcher Productised Himself

Blockchains separate the backend from the frontend.

@LensProtocol takes this further by specialising the backend for social interactions.

A thread about Lens Protocol 🧵

Everything is an NFT! Literally.

Profiles, comments, follows, mirrors(retweets) are all nfts, or represented using nfts.

This enables direct ownership of content and, programmability (cuz nfts are basically programmable objects).

The main nfts are:

• ProfileNFT: ownership over this nft gives you control over your profile.

• Publications: these are posts, comments, mirrors all posted to a user's profile and stored in the user's wallet.

A key feature of nfts is their inherent "programmable" nature.

Lens Protocol leverages this in the form of modules.

• Modules are whitelisted contracts that adhere to a specific interface.

• They have state and contain logic to be executed when a certain event occurs.

• Follow Modules: called when a user tries to follow a profile.

• Collect Module: executed when a user tries to collect a publication.

... etc.

These modules allow for logic such as "fee-on-follow" or even a "subscription".

Basically any logic you can think up!

𝗠𝗼𝗻𝗲𝘁𝗶𝘀𝗮𝘁𝗶𝗼𝗻

Because creators own their content via the Lens Protocol, they can allow their followers to purchase that content as nfts.

A creator can attach a collect module with arbitrary logic.

Web2 turned websites from digital newspaper to social networks and shopping stores. It leveraged the programmable nature of these pages.

Similarly NFTs are programmable objects. By leveraging this @LensProtocol has built a decentralised, composable, user-owned social graph.

Thanks for reading

Hope you learnt something new here.

If you liked this, I’d appreciate a retweet (it tells the Twitter algorithm to show it to more people)

Lens Protocol. A decentralised, composable, user-owned Social Graph

How did it go from this:

1984: IBM earned $5 bn and a 19 yr old Micheal Dell incorporates Dell with $1000 of funding.

To this:

2005: Dell earns $9 bn in profits while IBM's pc div is sold to Lenovo.

🧵 about how Dell dethroned IBM

In the 1970s personal computer was was an unfamiliar idea with the American people.

Only businesses and universities used computers.

IBM dominated this arena with 60% market share.

As the personal computer market emerged in the early 80s, IBM was the time-tested, obvious choice for most consumers.

It had a massive supply chain consisting of resellers and distributers to reach every corner of America.

But their situation in the pc space was quite different:

• In the mainframe-sector they built their own components, and wrote their own software.

• But for PCs, they outsourced the chip design to Intel and bought the OS from a startup called Microsoft.

The pc market grew so fast, even IBM couldn't keep up with demand.

Because of the massive demand, the dealers had trouble managing inventory and would ofter over-order and over-pay

To compensate for their loss, the dealers started selling the extra pc's for dirt cheap: The IBM Grey-market.

Soon enough, clones of IBM started popping up.

One of these clones was Dell.

But Dell was no ordinary clone.

Dell obsessed over computers. 

Took them apart, modded them, and even resold them for a profit.

While messing with computers, he realised that the components of IBM pcs cost between $600-$700

But the pcs were being sold at a huge markup of $3000.

A large chunk of the $3000 went to the resellers.

But the dealers didn't really understand pcs.

Most of them sold gadgets like stereos and stuff, and sold pcs cuz they seemed like the next big thing.

• IBM couldn't make PCs cheaper cus of their reseller network
• But Dell knew the actual cost of the parts and knew where to buy them.

While Dell realised that resellers were a cash-sink, most clones just blindly copied this from IBM.

He had spotted a golden opportunity.

Phase 1:

Without having to pay resellers, Dell could massively undercut the competition.

Word of his cheap, well performant pcs got around.

Soon enough, professionals from nearby cities started coming to Dell for their pcs.

But without e-commerce how did Dell reach the lengths-and-breadths of America?

For phase 2:

• Dell established a dedicated sales team instead of relying on resellers.

• Different teams for B2C and B2B. Set it up such that a sales person's background matched the client's field.

The sales team could then collect inputs and feedback for the engineers.

Driving an iteration-feedback loop.

As the scale of operations grew, Dell deployed the Just-In-Time model.

This reduced their waste, improved cash-flow, and maximised profits.

TL;DR

• Obsess over your industry. Discover the flows in the market-leader's plan.

• Compete with the best in your market.

• Read about emerging market. The fields that are growing so fast that big players can't cater to the demands.

How Dell dethroned IBM

Wordle is the internet's crossword.

🧵 why it's (probably) not going away

It gets the community right.

Communities have their own vocabulary. For wordle, it's boxes.

"If you know, you know" kinda feeling when your entire feed is covered with these tiles.

Individual game but collective experience.

We play it on our own, but since we're guessing the same word, it feels like we're playing with others.

Scarcity. Just once a day.

The right amount of dopamine hit.

The audience can't wait for the next one.

Turns into a ritual.

It's now part of your daily routine, like crosswords on newspapers.

It's the Internet's crossword.

Accesible.

No email, no sign ups etc.

Reduce friction to entry.

Recap:

• Community. A sense of belonging via the box vocabulary (🟩 🟨)
• Scarcity. We *want* tomorrow's word. We can cheat but...
• Ritual. It's become a daily habit.
• Accessibility. Just need english and internet.

Thanks for reading :)

past threads here: @_yashKarthik

Wordle is the Internet's Crossword

@balajis talked about the DeFi Matrix on The Tim Ferriss Show.

It went over my head the first time.

I 𝘵𝘩𝘪𝘯𝘬 I understand it now 🧵:

What is it?

• It creates order books for everything.

• It's a way to represent each asset digitally, and trade them like coin pairs.

So what's the new thing?

• The wallet enables *competition* between all assets.

• They allow us to price, compare and trade things we never could.

Example: a byte on my hard-disk for a minute of your CPU?

How is this different from existing markets?

1. Everything is liquid

Everything can be exchanged for everything else without converting to cash.

2. Less wealth in cash

(less cash good as it depreciates)

An analogy:

Google News indexed all newspapers and made every local newspaper compete against every other.

This killed incompetent newspapers.

The DeFi matrix will make every digital asset compete against every other.

It will work as a check on fiat.

What's so big about this?

• Order books offer a *first principles* view of supply and demand

• Token enable measurement & representation of things like space & time

Wallets and digital markets combine these by enabling live competition and liquidity between all these assets.

Thanks for reading this thread. Hope u learned something new.

btw I write threads like this every week. Follow to stay updated ;)

See past threads here: @_yashKarthik

Also, here's the clip where Balaji. S talks about the Defi Matrix: 

https://www.youtube.com/watch?v=BKfnj9SrzCY

Balaji's Defi Matrix

67% percent of all ebooks sold are via Amazon.n

Solution: book NFTs.

🧵:

The good:

• Single giant repository of all the books you bought.
• Sync

The bad:

• Gives them upper hand while deciding on terms & conditions. 

• Potential censorship of sellers / books.

• Can be read only on Kindle (unless u jump thru hoops)

Take rates:

Author gets either 70% or 30% of the revenue based on the price of the book.

(it's not entirely clear, to me, how it works)

https://twitter.com/cdixon/status/1425645845991477250

So why do people still use it:

• For buyers it's really convenient. It delivers everywhere, and delivers fast.

• For sellers it helps them reach scale / distribution.

Lots of people use Amazon (not just for books)

⇒ Larger potential audience for a writer.

But writing changing. @dickiebush puts it nicely:

"While most legacy writers focus on creating a piece of work and then (in the final hour) scrambling to put a marketing plan together to attract readers, Digital Writers build their audiences as they go"

https://www.ship30for30.com/post/how-to-start-writing-online-the-ship-30-for-30-ultimate-guide#toc-0

So for a writer with existing audience, Amazon is no longer a *must*.

Similar to how many sellers choose to sell using Shopify.

https://twitter.com/cdixon/status/787121343363895296

𝘽𝙤𝙤𝙠𝙨 𝙖𝙨 𝙉𝙁𝙏𝙨

(yay utility)

Here's how this would work:

• Writer sells NFT on some platform.

• The NFT acts as a *pass* to a *vault* on IPFS or Arweave.

(vault would be smth like an encrypted file/folder, but I'm not sure if encryption is the right term)

Now the buyer, with their 12 words, can access the book anywhere.

1. Buyer navigates to book vault.
2. Connect wallet, prove that you own the book.
3. Download / read in browser.

This entire system would be managed via smart contracts that *cannot* be evil.

1. Preventing censorship of certain categories
2. Enabling users to actually own the ebook.

This can be generalized to anything digitally-buy-able: music, movies...

𝗣𝗶𝗿𝗮𝗰𝘆:

NFTs ensure that only a single person can have the *pass* to the vault at a certain time.

But...

• Groups could share the wallet seed.

• After unlocking the vault, the person can download the book, it now becomes pirate-able.

Not to be un-innovative, but these are problems that plague the current world as well.

The key problem NFTs solve is the problem of having single, large vendor.

Allowing everyone to sort of upload to a cloud drive and selectively give out *passes* to that drive.

Thanks for reading this thread.

Follow to stay updated :)

See past threads here: @_yashKarthik

Also I'm still thinking about this idea and not entirely clear about:

• DRM

Still thinking about it's fairness, how can we prevent piracy without it.

• Multi-sig wallets

(first, I don't know how these work).

They could serve as a book wallet xD.

Book NFT

How web3 *supercharges* web2 communities🧵:

Breaking down @_trwih 's latest episode with @alexisohanian 
https://youtube.com/watch?v=-n5084IfnxU

Web2 communities: discord, fb groups etc.

These groups lack leadership; because 

1. No ownership: group mod is a time intensive job, with no financial upside.

2. No easy way to decide on the group's future.

When you allow people to vote, and share the upside (& downsides) with the group, that's when the magic happens.

A *lot* of creation happens on these platforms, but most of the value is lost to the platform.

Also, the community is dependent on the platform it's built on.

This makes it much harder for startups & creators to grow without worrying about the platforms changing the rules on them.

The internet was the first time we could curate our tribe.

Web3 is the first time we can own it.

Reddit already has some aspects of the community & governance.

but without the ownership, and economic dimensions.

Ownership converts "karma points" to real value.

DAO gov tokens are, in some sense, karma points in *that* community.

Recap:

• Governance
• Skin-in-the-game / shared-ownership
• Owning vs renting the platform

Watch the full episode here:
https://youtube.com/watch?v=-n5084IfnxU

Thanks for reading this thread.

btw I write threads like this each week. Follow for more :)

See past threads here: @_yashKarthik

How web3 Supercharges web2 communities

Bitcoin scales where the dollar doesn't - socially.

How blockchains trade computational scalability for social scalability 🧵:

Based on:
https://unenumerated.blogspot.com/2017/02/money-blockchains-and-social-scalability.html

by @nickszabo4

Why do humans run the world?

Humans control the world because we are the only animal that can cooperate flexibly in large numbers.

We socialize across genetic boundaries.

Through stories like religion, nationality etc.

To have efficient cooperation, we organized ourselves into centralized hierarchies.

Centralized enforcement breaks down at national borders.

Efficient, but not universal.

While human efficiency has stayed the same for the past thousand years,

computers have been doubling in power, efficiency & halving in size every few years.

With these "super" computers, we can trade off some efficiency for social scalability.

Computers - efficiency > Humans + efficiency

We can replace institutions that were traditionally centralized, to preserve efficiency, with "inefficient" blockchains that provide a new kind of scalability:

Social scalability.

Cryptocurrencies allows anonymous humans (or robots) who don't know or trust each other to transact securely, across boundaries, with just an internet connection.

"Scalable markets and prices require scalable money. Scalable money requires scalable security, so that a greater number and variety of people can use the currency without losing its integrity against forgery, inflation, and theft." - Szabo

Cryptocurrencies scale better socially

Recap:
• Humans are good at coordinating.
• Efficient coordination - centralization.
• Now computers: super efficient rel. to humans.
• Making them inefficient is still > efficient humans.
• Trade computational scalability for social scalability.

Thanks for reading this.

btw I write threads like this every week. Follow to stay updated :)

See past threads here: @_yashKarthik

Bitcoin Scales Socially

The infrastructure for a censorship resistant internet is being built in discord servers.

A thread about the future of internet 🧵:

It starts with money.

Money is very important, it's nearly everything to most people.

If you can create money that cannot be stolen or hacked or blocked.

If you can create "unstoppable money".

You can create unstoppable-anything.

Bitcoin was the experiment to create unstoppable money.

Ethereum is the experiment to create unstoppable applications.

Starting with financial apps - DeFi. Because they are probably the most important.

Over time we will see gaming networks, social networks, governance protocols, all turn unstoppable.

Blockchain is gonna replace large chunks of the internet.

Until 20 years from now, it's gonna be unfathomable to run an internet without blockchains.

The Internet is destroying institutions and replacing them with individuals.

It's exposing the illegitimacy and how unnecessary the gatekeepers are.

Eg: Wall St. vs cryptocurrencies;
NYT, Washington  Post vs Substack (not crypto but still)

Crypto-internet is the new, true wild west.

Dangerous, confusing and full of scams.

Institutions cannot move into the Wild West.

They look for consensus, which takes time.

They are gonna be overrun by the internet.

We are gonna have much more fluid organisations - DAOs

China is trying to create a digital Yen to compete with Bitcoin.

Bitcoin's a threat to them in the short term.

In the long term, the internet itself will become a censorship resistant, free market of information.

And they'll be using an older, broken, censor-able version of the internet.

Recap:
• Satoshi invented unstoppable money Ethereum takes this to the next level
• The internet is gonna replace institutions with individuals & DAOs

• In the long term the internet is gonna become a free, unstoppable avenue of information. And crypto is at the heart of this

Thanks for reading this.

I write threads like this every week. Follow me to stay updated :)

Past threads here: @yashhhKarthik