In this time when many firms with great tech vision are taking bold steps into Web3 and Metaverse, e-commerce giant Amazon isn't left out. Amazon has decided to launch a non-fungible token (NFT) project around spring this year, as per reports by Blockworks.
The report cited some sources familiar with the matter, claiming that Amazon partnered with more than ten crypto projects to support the initiative. Given the firm's reputation in the tech industry, this initiative can revive the NFT market now that it has declined from its 2021 highs.
According to the report, Amazon will focus on several NFT sectors, including gaming. It would reward players with unique items in the form of NFTs. As of now, Amazon Prime subscribers already have access to a video game platform. The users have access to the gaming platform’s catalog and earn rewards monthly, allowing them to claim AAA games. Amazon's upcoming NFT initiative could further strengthen this service by adding new incentives and attracting new subscribers.
According to Blockworks, the NFT platform is still in the development phase and might run on Amazon instead of Amazon Web Services (AWS). More information about the NFT initiative could be available in April, but Amazon or its executives have not released any official details.
A Future in Web3 and Blockchain is Inevitable, AWS’ VP Says
As we mentioned earlier, several tech giants are venturing into the Web3 and the Metaverse. Mark Zuckerberg’s Meta, Twitter, and many others have launched crypto projects to enable users to interact with digital assets. Meta has been actively making plans to enter the Metaverse.
Amazon's e-commerce competitor, e-Bay, has attempted to venture into the NFT sector. As part of its efforts to enter the Web3 ecosystem, e-Bay acquired the NFT marketplace called KnownOrigin. It plans to attract a bigger audience and become a worldwide platform like Amazon.
Two weeks ago, Amazon's partnership with Ava Labs made headlines in the crypto industry. Ava Labs is the firm that owns the Avalanche Blockchain. E-Bay partnered with AWS to offer thousands of enterprises across the Avalanche network.
Howard Wring, vice president and global head of startups at AWS, commented during the partnership announcement. Wring said venturing into Web3 and blockchain is inevitable for the firms' future. According to him, no one knows when these innovations will become mainstream but looking at the previous growth cycles of Web3 and blockchain, mass adoption is inevitable. Wring added that the accelerating speed of these innovations is tremendous, and his team is excited to be part of it.
The Growth Of NFTs Over The Years
Web3 and NFT technology is growing like a raging storm, ushering in a new era of digital creativity. According to Chainalysis, NFT art sales reached $41 billion in 2021, surpassing the traditional art industry.
NFTs are among the fastest-growing digital assets class, allowing artists to showcase their creativity and make money without needing middlemen or record labels. But this is only the tip of the iceberg in the capabilities that NFTs can bring into Web3 and the entire crypto.
NFTs allows people to create unique digital assets and items that people can trade on an open market. NFTs enable people to collect and store art, which could also be a way of preserving cultural heritage, which is one of the things driving their growth.
According to DappRadar’s report, In 2021, NFT sales volumes reached about $24.9 billion, a massive growth from $94.9 million in 2020. NFTs became the most-discussed topic in the digital assets industry in 2021 for digital artwork, animal pictures, music, trading cards, online gaming, and more. Although not new, this group of assets first made headlines in March 2021 when Beeple’s collection, First 5000 Days, became the most expensive NFT in the world at $69 million.
The number of NFT wallets increased notably in 2021, from about 545,000 in 2022 to nearly 28.6 million in 2021. That's tremendous growth for new technology. According to data from Statista, about 1,000 to 3,000 unique wallets bought NFTs in April and May 2021. April recorded over 30,000 unique NFT buyers, while May observed about 25,000. In March 2021, there were up to 39,000 unique purchasers. That is a massive increase from 2020, when some months have less than 10,000 unique buyers.
The largest peer-to-peer NFT marketplace, OpenSea, had a total trading volume of roughly $14.68 billion in 2021. OpenSea’s transaction volume saw a 26.22% (18.6 billion) growth in 2022 alone. The marketplace’s trading volume reached an all-time high of $3.7 billion in January 2022 alone.
However, the NFT market is also volatile. Like every other digital asset, in 2022, the NFT market experienced a decline from its 2021 all-time high. According to data from Statista, the number of active wallets that traded NFTs declined by more than 17% between the second and third quarters of 2022. The NFT market owes this decline in sales volume to the 2022 bear market.
According to NonFungible.com’s quarterly NFT market report for Q3 2022, NFT trading observed its first-ever quarterly loss. Q3 saw a little over $540 million in total losses. The average price of NFTs decreased by more than 80% in 2022, with the value dropping 87% between April 1 and September 30, 2022.
NFT Sales Volume in the Art Segment Worldwide for April 15, 2021, to January 15, 2023.
According to NonFungible.com’s report, there were more NFT buyers than sellers in Q3 2022. About 150,000 buyers were going for 110,000 NFT sellers. It means most NFT investors hold their assets for longer to limit losses. Those who had no option but to resell their assets, sold at a far lesser price than the original value.However, NFTs have started recovering. Statista shared data stating that NFT sales volume in art increased slightly in January 2023. Amazon’s move to launch the initiative could also boost NFT’s growth by introducing new investors to the industry.