The SudoSwap token allocation proposal has sparked controversy. Why are XMON holders the biggest beneficiaries?

Written by: Shiwen, Odaily Planet Daily

Today, SudoSwap announced the distribution plan for its governance token SUDO. In a market lacking hot projects, this "NFTFi beacon" release has drawn a wave of criticism.

The reason lies in the fact that, according to the official plan, SudoSwap's community users received almost no allocation of SUDO airdrop, with only 1.5% of SUDO allocated to LP pool users. The remaining 98.5% of the allocation is almost entirely reserved for the team and the token XMON and NFT holders of the 0xmon project. Among them, XMON holders will be allocated 25.12 million (41.9%), nearly half of the total allocation.

The specific token distribution rules are as follows:

Initial total supply: 60 million SUDO.

XMON holders: 25.12 million, 41.9%.

0xmons NFT holders: 900,000, 1.5%.

Supplementary LP airdrop: 900,000, 1.5%.

Treasury: 15.08 million, 25.1%.

Initial team members: 9 million, 15%, vesting over 3 years with a 1-year lock-up period.

SudoRandomLabs: 9 million, 15%, vesting over 3 years with a 1-year lock-up period.

As a result of this news, the price of the XMON token surged, rising 28.2% in 24 hours, with a peak increase of 53.5%. The floor price of 0xmon NFTs also rose to 27 ETH.

In recent months, the NFT trading market has shown signs of decline, while the emergence of SudoSwap has injected a dose of excitement, gradually becoming a project of primary focus and active interaction due to its AMM mechanism and strong growth data.

According to Dune data, there are currently 21,725 users on the SudoSwap platform, and the platform's trading volume has almost shown a linear growth, exceeding 34 million USD.

These dazzling achievements cannot be separated from the early participating community users, and SudoSwap's actions are inevitably disheartening. Therefore, Odaily Planet Daily will focus on two questions: What is the basis for SudoSwap's distribution plan? What is the 0xmon that occupies such a large proportion of the allocation?

SudoSwap is part of 0xmon

0xmon is an on-chain AI-generated monster-themed NFT, inspired by Pokémon, SCP, and Lovecraft. Each 0xmon has a unique animation generated by a GAN (Generative Adversarial Network) trained on pixel art images. The animation, name, features, and lore of each 0xmon are created by AI and then manually adjusted by humans. Additionally, it is built on Ethereum, so the entire content of each NFT can be fully encoded.

On the official website of 0xmon, we can see that 0xmon has created an NFT system that includes the XMON token and SudoSwap.

In a tweet released on December 7 last year, 0xmon clearly stated that the creation of SudoSwap was to allow users to exchange their 0xmon NFTs. Therefore, the distribution of the SUDO token will first consider the holders of XMON tokens and 0xmons NFTs.

From the above statements, it can be seen that SudoSwap's token distribution indeed fulfills its original promise. Moreover, 0xmons stated that the team has no VC, and the development and audit costs of sudoAMM have always been self-funded, so it seems reasonable for them to allocate a large number of tokens to the team.

Most users perfectly avoided the distribution rules

Many users likely used SudoSwap with the expectation of an airdrop, but this distribution plan almost perfectly bypassed the widely circulated interaction strategies. For example, listing NFTs on sudoAMM, quoting, providing liquidity, etc.

Looking at it today, the only remaining hope is to provide liquidity. Upon realizing this, I suddenly felt energized because I had also created a pool during the interaction process. Although the allocation ratio is only 1.5%, for someone like me who rarely participates in airdrop farming, it was already quite exciting. So I quickly studied the specific distribution plan. To my dismay, this part of the airdrop is limited to TRADE pools (pool 3).

SudoSwap's LSSVM protocol consists of many individual NFT pools. Each pool is managed by a liquidity provider and parameterized by custom joint curve parameters. Then, traders can choose a pool to trade or trade across multiple pools with the help of an aggregator.

The mining pool is a contract managed by a single address that holds a certain amount of ETH and a certain number of NFTs. They can be used to buy NFTs only with ETH (pool 1), sell their NFTs to obtain ETH (pool 2), or both, which is TRADE pools (pool 3). You can choose which type you want to create before creating the pool.

Unwilling to accept defeat, I returned to SudoSwap to confirm my memory, and indeed, I had created pool 2 instead of pool 3, and my last hope was dashed. Am I unhappy about this? Users who create single-sided pools also contribute to TVL and are counted in traffic statistics, while also bearing risks; why are these users completely ignored? Currently, the official has not provided any supplementary explanation.

Many users in the community jokingly remarked that perhaps 90% of pool 3 was created by insiders because they knew the rules in advance. According to Dune data, there are currently 28,334 pools on SudoSwap, which includes a collection of three types of pools. We can exclude the possibility of a single address creating multiple pools (which is highly likely). Therefore, the actual number of creations is far less than this. Currently, there is no information on how many addresses created pool 3, but from comments on Discord and Twitter, many people have had similar experiences to mine. It seems that the number of eligible users is also very few.

SudoSwap's token distribution gives off an air of "we only need ourselves, not users."

Some users spent a considerable amount on high gas fees last year, frequently following tutorials to interact, and those who participated in donations were not considered. Diligent users who tried to farm tokens on SudoSwap have been left empty-handed…

Additionally, many users are puzzled. From the token distribution, there seem to be many overlapping parts, for example, the 9 million tokens allocated to the initial team and the 9 million allocated to SudoRandom Labs. Is there a significant overlap among these team members? If so, then the team would account for 30%. Coupled with the 41.9% allocated to XMON token holders (with a total supply of 10,000 XMON tokens, and currently only 3,650 addresses holding them), it can be speculated that the distribution of most XMON tokens is quite concentrated, and whether the team holds a large number of tokens. If so, then the combined allocation for the team would reach at least 50%, which is a distribution ratio that has not been seen in any project so far. This operation has also led SudoSwap to gradually face FUD. Although the tokens have not yet been deployed, based on today's situation, there is little hope among users.