Gate NFT launches NFT Liquidity Pools, kick-off with MAYC and Azuki Fractional NFTs
Trading NFTs is a much different experience than trading other classes of cryptocurrency. Traditional NFT marketplaces rely on both buyers and sellers agreeing on often static prices, with a lot of time spent creating or sorting through individual offers. This reliance on price agreements between two parties is why NFTs are illiquid compared to other asset classes. This means that it is not always easy to trade an NFT at market value quickly.
However, cryptocurrency exchange Gate.io is changing this dynamic. Gate.io has launched Automated Market Maker (AMM) and liquidity pool functionality on Port NFT, its NFT marketplace. This allows buyers and sellers to instantly trade NFTs without relying on a price agreement between two parties.
At launch, Gate NFT has opened trading on four liquidity pools with Mutant Ape Yacht Club (MAYC) and Azuki fractional NFT. Currently, the new feature supports USDT for buying and selling NFTs in liquidity pools and creating LPs.
Liquidity pools and AMM on Gate NFT
AMMs are the same technology that decentralized exchanges are built on. They allow traders to buy and sell assets using liquidity pool (LP) smart contracts. Liquidity pools consist of two different assets that make up the trading pair, which enables traders to exchange one asset in the liquidity pool for another instantly. Additionally, anyone can create an LP and earn transaction fees, provided they have assets to commit to the pool.
By using liquidity pools on Gate NFT, an LP provider can create or participate in a pool consisting of NFTs from a particular collection paired with another cryptocurrency. Traders can then buy or sell within this pool, with the price determined instantly and automatically based on a set of known parameters. Investors could check the market value of cryptocurrency on the Gate.io exchange before trading NFTs.
Softer NFT trading and new earning opportunities
Gate.io has launched this new feature to make trading NFTs a faster and easier experience for all parties involved. Liquidity pools on Gate NFT immediately match market demand with supply, and provide the tools to make a particularly illiquid market more liquid.
Also, NFT collectors can access a new means of income beyond just selling their pieces on the market. By contributing or creating LP with their NFTs, they are rewarded with fees from every purchase or sale in the pool. In addition, NFT creators can start the launch of their NFT collection by making it easier to replace the door and earn revenue beyond just royalty fees.
