Thread by @leashless

"Hey @Mattereum folks, what do you think about Amazon's announcement they're going to get into the physical NFT business?"

Well funny you should ask, I do happen to have some thoughts about that.

Let's start at the beginning: what is Amazon really?

https://twitter.com/waleswoosh/status/1633061326971871232

Amazon has four fundamental assets: relationships (your credit card, their wholesalers), physical warehouses, web infrastructure, and behavioural data from billions of purchases.

In the age of AI, the behavioural data is probably worth the most.

So why NFTs & blockchain?

Amazon's big problem is fraud.

They just can't figure out how to get their supply chains to stop feeding (often dangerous) garbage to consumers.

The obvious Amazon play here is supply chain integration on the blockchain: NFT is minted by a manufacturer.

uk.news.yahoo.com/amazon-launch-…

You don't roll out a transformation like that all at once for everything. The people who make paper towels and pencil cases are not going to put an NFT on every single item they manufacture. This is just not happening.

The play has to be to introduce this "NFT trust mark" gently

"Is this a genuine Magic The Gathering" card?

That's a good job for an NFT. Get two: one for authenticity, one that's tradable. Good start.

But the people that should really watch out here are the crowdfunding sites like Kickstarter. They're in deep trouble. Let me explain.

Amazon does a lot of work to support innovative new brands: Amazon Launchpad amazon.co.uk/Amazon-Launchp…

That ecosystem is the right place for Amazon to inject the NFTs.

Buy the NFT, and when the brand has sold 5000 NFTs, do the manufacturing run. Kickstarter, but with Amazon might

If they don't sell enough NFTs, do a 100% refund.

And, of course, the NFTs are redeemable for the physical goods. So if you know a thing is going to be a *huge* hit you buy 10 of the NFTs and sell them off as the goods get closer to the delivery date.

Earn income from taste!

Now what this give Amazon is critical early insight into *what people want* without anybody having to actually build the products.

A bunch of people make a bunch of NFTs for a bunch of stuff they're sure they can manufacture but they don't start the production run until sold out

Think about how much that cuts Amazon's costs-and-latency on trend discovery relative to other retailers.

Amazon: "they're buying and bidding up a ton of these Long Furbies, wow" - but no Long Furby has been manufactured yet. The trend is identified and sized long before product

Say there's a manufacturing break point: 2500 yards of fabric = 25,000 Long Furbies. After that you have to get more fabric made. That takes 13 weeks.

So Batch 1 Long Furbies are limited to 25,000 not because of artificial scarcity, but because of *real supply chain dynamics*.

As it becomes clear Batch 1 Long Furbies are going to sell out, Amazon lists NFTs for Batch 2.

They'll be out 22 weeks after Batch 1. Does anybody want a Long Furby 22 weeks after Batch 1 drops?

"Gee... let's see how many NFTs we can sell."

Enough to make Batch 2? Or refunds?

Consider the Baby Yoda Situation in which Disney released The Mandolorian WITHOUT ANY BABY YODAAA MERCH AVAILABLE.

junglescout.com/blog/baby-yoda/ That cost Disney millions.

But suppose Disney could have sold NFTs for upcoming Baby Yoda merch? Minimise the loss, because people buy now

So this is what Amazon are going to be building. It maximises the value of their existing transaction database, and enhances it by letting them look into the future.

That's massively worthwhile, far more than an NFT store. It enhances their core business and makes sense there.

This is also predictive of the future of crypto in general when smart people from the real world start to really metabolise crypto.

The internet was a nerd phenomenon in the 1990s. It was a global revolution in the 2010s.

Crypto is on the same trajectory. But a lot faster.

Finally instructables.com/Longifying-You… this is a Long Furby.

Tell me you don't want one? Just plug that cute little bunny into ChatGPT with instructions to act like a cute fuzzy animal from a kids TV show and *instant kaboom* the best Christmas present in living memory.

Finally, my company @Mattereum is also in the physical asset NFT business.

We plan to do exactly what we've described here as Amazon's business plan *for ultra high value physical assets like real estate*.

Buying off plan means buying housing pre-build.

galliardhomes.com/property/off-p…

@mattereum So imagine you have an NFT which is for an apartment 17 floors above the ground, and there's just dirt on the site. No construction has happened.

Lots of baked in risk. Risk means the price is reduced. What if there are construction delays?

Give me 5% discount. On $1,000,000.

Two weeks before construction finishes, that apartment is now trading at zero discount: do you want the apartment, or do you want $50,000 more than you paid for the NFT when you bought it?

It's easy, safe money if the property developer is trustworthy. This is a *trust market*.

Because of crypto winter and pandemic delays it took us four years rather than two years to build the legals to do this kind of thing.

Another two years to work up from $500 collectible deals to $2,000,000 real estate deals mattereum.com/land is the first customer listing.

Imagine that trajectory carried forwards another two years: all the amazing power that Defi gives us, but *applied to real world industries like construction*.

All iron-clad in @Mattereum's bombproof risk management framework: technical, legal and commercial deal bomb proofing.

@mattereum The real commercial adoption of the blockchain for high value assets could not begin until somebody got the legal and risk management frameworks in place for real world transactions.

@Mattereum did that work, and we are open for business. Two years now!

Bring us your projects!

No more Baby Yoda shortages.

That's what the blockchain is for: to ensure an adequate supply of Baby Yodas when they get unexpectedly popular.

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