I was supposed to be performing in a hybrid metaverse-real life music festival in August. This past weekend, I received an email from the organisers saying that it will now just be a real life festival due to the bad reputation crypto and metaverse associations find themselves in.
In addition, this week I read that Meta is walking back NFT support on Instagram and Facebook, which was an experiment that barely lasted a year, as the company similarly slows down its push into the metaverse.
“We’re winding down digital collectibles (NFTs) for now to focus on other ways to support creators, people, and businesses” reads a Twitter posted on Monday by Stephane Kasriel, Meta’s commerce and financial technology lead.
“Such a short-sighted move,” said one crypto artist, replying to Kasriel on Twitter. “Inclusion of digital collectibles has so much potential to help creators engage their communities and counterbalance the pitfalls of attention-based advertising economies.”
The popularity of NFTs is often backed by crypto investors and creators who believe the technology could help creatives build communities and enable digital commerce. Brands have been interested in NFTs to create loyalty programs that are based on blockchain technology. NFTs have lost some of their enticement, however, and marketers are using more accessible terms like “digital collectibles” and “virtual creations.”
It must be noted that Meta was not at all the only social platform to bring NFTs to the forefront. Twitter has also given NFT collectors the ability to connect their social media accounts to their digital wallets. The wallets hold the NFTs, which can then be displayed on the social media apps. Reddit has also integrated with digital collectibles.
Nevertheless, the Meta’s interest in NFTs coincided with its ambition to rebrand as a metaverse company, based on the development of virtual reality devices and services. In 2021, Zuckerberg rebranded Facebook to Meta in part to signal the interest in the metaverse, mixed reality and Web3.
This year, though, Zuckerberg has been leading a retrenchment from the metaverse as Meta conducts layoffs and sunsets underperforming projects. In November, Meta laid off 11,000 workers, about 13% of staff, and this month it begins a new round of reductions. Zuckerberg has promised to focus on “efficiency” at the company.
It poses many questions about web3 seeing that NFTs stand as one of its unique pillars offering a plethora of utilities. If a consumer buys a wearable NFT in one setting, the item is transferable to another setting. NFTs also foster interoperability among games and other online worlds in the metaverse—NFT holders can take their digital goods wherever they go in the metaverse. Last year, for example, Zuckerberg spoke about the potential for NFTs to enable virtual commerce. “I would hope that the clothing that your avatar is wearing in the metaverse, you know,” Zuckerberg said at SXSW, “can be basically minted as an NFT. You can take it between different places.”
On the other hand, NFTs created opportunities for scammers to use social media to hype projects and leave investors holding the bag. And social media users have been the target of hackers who steal collections. Last year, Bored Ape Yacht Club founders had their Instagram account hacked, and the attackers posted a link that lured other collectors into a trap, ultimately stealing $2.5 million in digital assets.