How will it affect the marketplace?
Amazon is reportedly launching an NFT marketplace next month – a move widely hailed in the industry as it further cements the growing use of digital assets. The effort follows that of other mainstream companies dipping their toes into the space, including GameStop and Reddit.
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According to Blockworks, Amazon customers will be able to purchase NFTs tied to real-world assets. The company will notify US Amazon Prime customers about the digital collectibles plan when it goes live.
The marketplace — set to go live on April 24 — will begin offering 15 NFT collections, which will be available on Amazon’s website and can be viewed by clicking on the “Amazon Digital Marketplace” tab, Coingape reported. Customers do not need crypto wallets to buy NFTs on Amazon.
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Amazon ‘a trusted middleman’
Amazon’s entry into NFTs is important for two main reasons, said Christopher Alexander, head of communications for Liberty Blockchain.
“The first is brand related,” he said. “Amazon is well known and trusted by more than 200 million customers with Prime membership. Amazon can serve as a trusted intermediary to experience Web3 for the first time. Second, Amazon brings significant lobbying power to a crypto industry that is fighting on multiple fronts on the Hill.”
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Other companies that have entered the space include GameStop and Reddit. GameStop launched an NFT marketplace with ImmutableX Pty Limited in October 2022. Reddit started its collection last July and has brought nearly 6.9 million people to Web3 since, according to a tweet from Hype Partners.
CJ Reim, a contributor at Core DAO, explained that Amazon’s news underscores how there is still momentum for more non-cryptotech firms to experiment with NFTs and crypto more broadly.
“It is important to note that this type of experimentation will help familiarize the large customer bases of these companies with Web3 technology.” Reim said. “But again, we’re still in the early stages here, and it will take time for more companies and brands to incorporate digital assets into their existing technology stack.”
A look at the NFT market
The NFT space has taken a beating – just like the crypto space at large – since the May 2022 TerraUSD/Luna crash, the subsequent platform crash and the infamous FTX debacle.
Still, it seems to be picking up again. DappRadar noted in its February industry report: NFT trading volume rose to $2 billion for the first time since last May, up 117% from the previous month, driven mainly by Blur – the zero-fee marketplace launched last October.
Now it remains to be seen whether Amazon will compete with “pure” NFT marketplaces like OpenSea, but experts agree that there is room for competition in an area that is quite nascent.
In fact, trading of NFTs on the major marketplaces continues briskly, even though floor prices are down compared to the bull run days, said Anthony Georgiades, co-founder of Pastel Network.
“However, knowing Amazon, what they have in store for their reported marketplace is likely to differ markedly from, say, what OpenSea has to offer,” he added. “I wouldn’t be surprised if Amazon tries to incorporate NFT technology into their current business operations, perhaps tying them to the sale of physical goods. It’s still too early to say exactly what’s planned, but it’s really exciting to see a Web2 giant dipping its toes into the crypto world.”
Another factor that could be in Amazon’s favor is the retail giant’s distribution network, some experts say.
While it’s still too early to say whether Amazon’s NFT marketplace aims to compete with OpenSea, they could well coexist, said Mo Shaikh, co-founder and CEO of Aptos Labs.
“But with the distribution power that Amazon has,” Shaikh said, “we can expect to see real benefit, something that other marketplaces and other infrastructure can’t handle.”
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This article originally appeared on GOBankingRates.com: Amazon Selling NFTs: How Will It Impact Marketplace?
