A worldwide crypto exchange platform, Gate.io has released an exclusive feature named “NFT AMM” developed on the Automated Market Makers protocol. The latest feature aims to offer additional trading options and liquidity for the consumers attracted to the non-fungible tokens. The NFT AMM protocol is structured to price the non-fungible tokens via mathematical formulas.
Gate.io Releases ‘NFT AMM’ Feature to Offer More Trading Opportunities and Liquidity
It is different from the conventional trading companies that utilize the order book-related method. The respective feature is anticipated to offer more liquidity to provide convenience in NFT trading. In this respect, it will permit the consumers to turn into liquidity providers (LPs) in the market to earn generate more revenue. In the mainstream trading market of non-fungible tokens, peer-to-peer (p2p) trading is considered to be the most frequently utilized method.
The purchasers can either provide an offer related to the non-fungible tokens of their interest or purchase them straightly based on the price listed by the seller. Nonetheless, the respective method contains a few restrictions because the sellers are not always allowed to rapidly perform the sale. In addition to this, they may require decreasing the price paving the way for a loss if there is a need for selling the assets rapidly.
NFT AMM Targets Turning Consumers into Liquidity Providers
To deal with the respective problems, the platform released the NFT AMM feature. It pays considerable attention to liquidity and permits the clients to become LPs. Through their participation in the liquidity of the market, the consumers can get more income. The automated market maker protocol is normally utilized by platforms that offer decentralized trading. These platforms use mathematical formulas to price the assets.
This is dissimilar to the conventional trading forums that utilize the method of order books where the pricing algorithms are utilized for asset pricing. The pricing formula of the AMM protocols varies based on the nature of the protocol. As per the expectation, the NFT AMM feature will offer extra liquidity to enhance NFT trading.
In this way, the consumers of Gate.io will be permitted to play the role of LPs that contribute funds to the liquidity pools of a protocol. The respective pools assist in the conduction of transfers with more funds injected by the liquidity providers. On offering liquidity to protocol, the liquidity providers are provided a commission taken from the transfers taking place on the pools.
