Facebook and Instagram parent Meta is stepping back from the world of non-fungible tokens (NFTs).
“We’re winding down digital collectibles (NFTs) for now to focus on other ways to support creators, people, and businesses,” tweeted Meta’s commerce and fintech lead Stephane Kasriel.
Meta was among a number of brands, big and small, that are either exploring or using NFTs to help build loyalty and community. Could Meta’s decision to step back from NFTs hurt the wider digital collectibles ecosystem?
Experts we talked to all think Meta’s change of heart has more to do with the company itself rather than NFTs.
Wes Levitt, Head of Strategy at Theta Labs thinks the decision should be seen in the same light as the recent large scale layoffs at the company, with the company backing away from some of the non-core initiatives. “Given their profits are down significantly from 2021, I expect they’ll focus on rebuilding their core ads business before further expansion,” reasons Levitt.
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Thomas Bedenk, VP of Extended Reality at Endava offers a similar view, arguing that Meta might feel that NFTs as a technological implementation may have too limited a target group at the moment. “Meta is looking for scale, and to accomplish this, they are trying to focus on their core products and future strategy,” shares Bedenk.
Meta doesn’t get Web3
Commenting further on Meta’s NFT strategy with respect to the metaverse, Bedenk says the decision is perhaps reflective of the company realizing that its platform never really played an essential role in the NFT economy to begin with.
He argues that the metaverse at the moment draws its potential more from its ability to serve as a social, spatial, and immersive platform for customer interaction, rather than being a market for decentralized crypto.
“This means that brands and advertisers might still find value in NFTs, as long as they have always designed their products and initiatives with collectors and investors set at their core targets,” suggests Bedenk.
Read More: NFTs helped creators earn almost $2 bn in royalties
Brandon Tucker, growth lead at Marinade Finance, couldn’t agree more. He says Meta’s pivot to the metaverse has not just been very costly to shareholders, but has also alienated creators thanks to charging the “Web2” take rates of 40% or more.
“The whole point of Web3 is to give more power to creators and communities and not to these traditional shareholders. So until they’re actually willing to line up and participate with that Web3 ethos they will continue to struggle to attract Web3 users,” says Tucker.
In the same vein, Levitt too thinks the worst that can come from Meta’s exit is the loss of a good example of NFT adoption. “Meta’s NFT business never had much of an impact on NFTs overall, so I doubt its winding down will hurt NFTs as a whole,” believes Levitt.
NFTs aren’t going anywhere
Many of our experts think Meta’s decision to roll back its NFT initiatives is part of the wider momentum that has seen NFTs lose the mainstream hype. While that may be the case, Felix Bengtsson, CSO, Planet IX feels, the core community of collectors and builders in the NFT space are still creating art and building more than ever.
“People must remember that it is a very young space – new creative ways and ideas emerge on an almost daily basis,” stresses Bengtsson.
While Meta was a recognizable voice in the NFT ecosystem, it was just a part of the choir. Many of our experts believe that while Meta’s decision could cause some companies to look at their NFT strategy, at the end of the day most companies would base their decisions not on the actions of another, but rather on their specific values and goals for creators.
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“NFTs have gained massive recognition based on the new opportunities it offers creators by giving them a unique way to monetize their digital creations, connect with their audience and the ability to certify the authenticity of digital assets,” explains Abigail Abban, Co Founder & CCO, Big Girls Rise NFT. “Hence the decision of Meta won’t have an adverse impact on NFTs.”