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Could OpenSea become the Amazon of NFTs? Web3 marketplace buys up competitor Gem

The field of NFT aggregation is relatively new, but demand has risen quickly.

Could OpenSea become the Amazon of NFTs? Web3 marketplace buys up competitor Gem
[Source Images: Jakub Porzycki/NurPhoto/Getty]

Like with most strains of tech, as crypto grows in maturity, we might expect some Googles or Amazons to emerge—in other words, industry superpowers that capture dominant shares of their markets. And as far as NFT marketplaces go, OpenSea is already on the road to rule.

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Now its empire just got a lot bigger. According to a Monday blog post from OpenSea, the company has snapped up Gem, a leading marketplace aggregator. Terms of the acquisition were not disclosed.

The field of NFT aggregation is relatively new, but demand has risen quickly. Such platforms let NFT speculators purchase tokens from various collections and marketplaces in a single transaction, thus saving money on “gas” fees that accompany every blockchain transaction. Without aggregators, NFT purchases must be made piecemeal from different marketplaces that often offer different items based on which blockchains they support, in multiple transactions with gas fees paid each time.

And that can add up to a substantial sum: According to a report from Protocol, on OpenSea—the world’s largest generator of gas—the fee currently averages $500 per transaction, with $100 being on the cheap end. By that math, gas could cost thousands of dollars regularly for an avid trader.

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In a fragmented industry where incompatible blockchains abound, aggregators are a smart solution for traders, and could even shape their behavior into new patterns—for example, being able to purchase a full shopping cart of NFTs with one check-out fee makes “sweeping the floor” more economical, which is the nickname for when somebody buys up a range of all the lowest-valued NFTs in a collection. Aggregators also allow users to browse for the best deals across various marketplaces, and view a compilation of analytics.

Of such platforms, Gem, which was launched in January 2022, is already among the biggest. In the past month, it gained nearly 35,000 customers and logged a trading volume of over $500 million.

But platforms like Gem, or its rival aggregator Genie, might make the most sense for professional traders who carry out high volumes of trades, as opposed to hobby traders who dabble in the occasional NFT. According to OpenSea, its acquisition will “invest in the future of the pro community.” Gem will continue to operate under its own brand as an independent product, which the company wrote will “allow us to learn from Gem’s expertise and intuition about the advanced NFT community—and bring the best of Gem’s features to OpenSea.”

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For the rest of the world, the acquisition might be a barometer for how this nascent industry has grown, and where it’s heading next. Consolidation is already occurring, early victors are emerging, and sights may be set on a future where NFT trading is a career prospect. Observers best brace themselves, because that future seems to be coming faster than ever.

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