Gate.io introduces the “NFT AMM” protocol for additional trading options and liquidity

Gate.io, a global crypto exchange platform, has released an exclusive feature called “NFT AMM” built on top of the Automated Market Makers protocol. The latest feature aims to provide additional trading options and liquidity for consumers attracted to the non-fungible tokens. The NFT AMM protocol is structured in such a way that the non-fungible tokens are evaluated using mathematical formulas.

Gate.io releases the “NFT AMM” feature to provide more trading opportunities and liquidity

It differs from the traditional trading companies that use the order book related method. The respective feature is expected to provide more liquidity to facilitate NFT trading. In this regard, it enables consumers to turn into liquidity providers (LPs) in the market to generate more revenue. In the mainstream non-fungible token trading market, peer-to-peer (p2p) trading is considered to be the most commonly used method.

The buyers can either bid on the non-fungible tokens of their interest or buy them directly based on the price provided by the seller. However, each method has some limitations as sellers are not always allowed to complete the sale quickly. Additionally, they may need to lower the price to pave the way for a loss if the assets need to be sold quickly.

NFT AMM aims to turn consumers into liquidity providers

To solve the respective problems, the platform released the NFT-AMM feature. It pays close attention to liquidity and allows clients to become LPs. By participating in the liquidity of the market, consumers can earn more income. The automated market maker protocol is typically used by platforms that offer decentralized trading. These platforms use mathematical formulas to value the assets.

This differs from the traditional trading forums that use the order book method, where the pricing algorithms are used for asset pricing. The pricing formula of the AMM protocols varies depending on the type of protocol. As expected, the NFT AMM feature will provide additional liquidity to improve NFT trading.

In this way, Gate.io consumers are allowed to play the role of LPs contributing funds to a protocol’s liquidity pools. The respective pools help to carry out transfers with more funds injected by the liquidity providers. When offering liquidity to the protocol, the liquidity providers receive a commission that is deducted from the transfers occurring in the pools.

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