We are used to NFT marketplaces acting as a classifieds board. Sellers post offers and buyers accept them or offer their prices. However, ArtDEX offers NFT trading via liquidity pools.
Let’s find out how ArtDEX works, how it’s better than traditional marketplaces, and what features will make life easier for artists, collectors, and pinball players.
How ArtDEX works
ArtDEX is a DEX where you can trade NFTs for tokens using curves. It’s pretty similar to SpicySwap, QuipuSwap or Plenty but for NFTs.
The developers, Genius Contracts, were inspired by SudoSwap on Ethereum. It’s a fairly popular venue with average transactions worth $500,000 per day.
SudoSwap swaps NFTs in liquidity pools with configurable peg curves. It’s basically the same as regular AMM, except instead of using the formula K = X × Y, it uses an exponent.
If you buy an NFT in such a pool, the price of the token will increase by X% (delta) from the current price. X% is a fixed value. Suppose a liquidity provider created a pool of 10 tecs and set a delta of 20% (1.2). If Alice and Bob each buy a token, the price first increases to 12 tek (10 × 1.2) and then to 14.4 tek (12 × 1.2).
The main advantage of trading NFTs in pools is permanent liquidity. In a regular marketplace, the user has to look for a counterparty to execute the transaction, or essentially look for liquidity as is the case in a P2P marketplace. At ArtDEX, the liquidity of NFTs and tokens is permanent: you can always buy or sell something through the pool.
How to use ArtDEX
NFT trading on ArtDEX starts with creating a pool. There are three types:
- NFT for Tokens: User only contributes tokens for other people to sell NFTs of the selected collection within;
- Tokens for NFTs: User only contributes NFTs for others to purchase;
- NFT and Token: User contributes both types of assets for others to trade in the pool and generate trading commissions for the creator.
The pools only accept tokens from a select collection. This comes in handy in the current NFT market with popular generative collections of hundreds or thousands of tokens.
It turns out that the user can buy or sell NFTs in any of the pools for the desired collection. If there are many NFTs in the pool, choose which ones you want at the current price.
Pools can theoretically be used as offers on regular marketplaces. If a user has a rare and really valuable token, they can create a pool specifically for sale and set any price.
Accordingly, the NFT prices for the same collection are very different when multiple pools are created for it.
ArtDEX released 3 test suites: TestTaco, TestBox and TestCard. There are also at least three different pools for each collection for users to try out the functionality or create their own pool.
Another interesting thing about commissions is that users can set their own fees when creating trading pools. In addition, they receive revenue every time a trade is executed in their own pool. Commissions are split evenly: half goes to GC-native token holders and half goes to sDAO holders via ArtDEX stacking.
The beta will end with a bonus event to coincide with the launch of ArtDEX. During this event, part of GC’s ArtDEX commission will be sent to SalsaDAO NFT holders.
SalsaDAO’s plans for NFTs and sauces
Genius Contracts plans to add three features to ArtDEX to improve user experience:
- Collection Offers & Sweeps: Instant search for the cheapest NFTs and one-click offers for the entire collection.
- Pool management: asset deposits, unlocked tokens and custom pricing options.
- Omni Search: Search the entire ecosystem in any Tezos market.
The team also plans to release three proprietary collections, NFTTrees, Timepieces, and Red and Green Salsa, ahead of the release of ArtDEX to mainnet. They will be dynamic: trees will grow, bear fruit and look different in real life depending on the season. Clocks show the current time. And labels mark the first step in offering physical products from SalsaDAO. The platform has even announced plans to arrange delivery of exclusive sauces!
All funds raised from the NFT collections will be spent on testing the project’s smart contracts.
Diploma
ArtDEX is an interesting idea for the Tezos NFT ecosystem that collectors would probably appreciate as it gives them the opportunity to buy or sell the token they like at a fixed price without having to search long for a buyer. NFT developers would also enjoy it as they can earn liquidity to start a full fledged trading pool and receive their fees as if they were royalties.
Theoretically, ArtDEX can even allow NFTs to be arbitrated against the offers on regular marketplaces. The fins will love it.
If you want to help Genius Contracts improve ArtDEX, visit the app, try it and leave your feedback on the community discord.
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