Meta Pulling the Plug on NFTs Across Instagram and Facebook
Meta, the Big Tech firm formerly known as Facebook, recently announced that it will be scrapping its nonfungible token (NFT) feature across its social media platforms Facebook and Instagram, just under a year after its launch. The news was tweeted by Meta’s Head of Commerce and Financial Technologies, Stephane Kasriel, on March 13, stating that the company is winding down its NFT support amid plans to focus on other ways to support creators, people, and businesses.
The relatively short-lived products were first launched in May 2022 for a select few creators on Instagram, before it expanded to Facebook in June, and then made NFT tools available to over 100 countries in July. However, it appears that the product’s performance did not match the level of investment and impact the company initially predicted.
While further information on the matter has yet to be made available, Kasriel emphasized that the company is still prioritizing ways to help users connect with their fans and monetize. Hence, Meta will focus on building payment rails on its platform and through its messaging apps, as well as on monetizing Reels—the company’s short-form video tool.
From the ashes of this decline comes some important lessons about the volatile nature of the NFT market and the role of social media platforms in its shift.
The Rise and Fall of NFTs on Social Media
In recent years, NFTs have proven to be a lucrative way for creators to monetize digital assets and for collectors to own and sell unique digital pieces. These assets can include anything from artwork, memes, music, and even tweets.
Given its popularity, social media platforms were quick to integrate NFT technology into their systems. For instance, TikTok launched its NFT marketplace in September 2021 to allow artists to sell music and virtual products through the platform. Twitter also made headlines when its founder Jack Dorsey sold his first tweet in March 2021 for US$2.9 million as an NFT.
Following these developments, it was only a matter of time before Facebook climbed on the bandwagon. It began by testing its NFT feature with a few selected creators on Instagram in May 2022, allowing them to sell their own NFTs on their profiles. By June, it had expanded the feature to Facebook and continued to roll it out across more countries over the following month. Despite its rapid deployment, the feature was evidently not sustainable as the company has now made the decision to pull the plug on NFTs.
Lessons Learned
The short-lived NFT feature on Facebook and Instagram comes as a reminder that the market for these digital assets is highly volatile and susceptible to drops in demand. It also highlights the critical role of social media platforms in shaping the market’s trajectory.
In particular, Facebook and Instagram’s decision to phase out the NFT feature may hint at the platform’s inability to capture and retain users’ attention and interest in investing in NFTs. It also raises questions around the necessity of NFTs in the social media landscape and whether or not their integration is beneficial to content creators and their followers.
This latest development also indicates a growing trend among social media platforms to shift from “hot” but risky innovations to safer bets that are more aligned with the long-term interests of both users and investors. As Kasriel points out, the company will be redirecting its efforts towards enhancing its Reels feature and building new payment rails, both of which are arguably more vital to creators and users in the long-run.
Conclusion
Meta’s decision to scrap NFTs on Facebook and Instagram underscores the volatile nature of the NFT market and the often shaky relationship between social media and innovative technologies. While NFTs are a hot topic at present, the platform’s decision suggests that they may not be suitable for long-term use on social media.
Instead, social media giants such as Meta may be better served by ramping up investment in more established functionalities that help creators connect with their audiences and monetize their content. Nonetheless, it remains possible that Meta and other companies will continue to explore NFTs and other forms of digital assets to maintain their competitive edge in the ever-evolving social media industry.