Why social networks won’t stop pushing NFTs

Image: Twitter

The recent NFT boom appears to have ended for average consumers. It seems that the work is just beginning for big social networks.

The introduction of unique profile pictures from artists that are based on the "Snoo" alien mascot will allow buyers to use them on and off. The avatars can only be bought with the currency of their choice.

In a sign of how badly damaged the brand has become, the announcement never refers to them as NFTs, even though they are stored on the PolygonBlockchain. They are referred to in the marketing copy ascollectibleavatars.

The company said in its announcement that it sees blockchain as a way to bring more empowerment and independence to the community. As part of our mission to better empower our communities, we are exploring tools to help them be even more self-sufficient and self-governed.

The latest social network to allow users to set an NFT as their profile picture is Reddit. Facebook began allowing some creators to showcase their NFTs that they own on a new "digital collectibles" tab in their profile. A month ago, the social network added a way for creators to show off their NFTs. Some artists were allowed to use NFTs as their profile pictures.

Demand for NFTs andcryptocurrencies fell off a cliff, just as these moves came. Dan wrote at the Guardian.

Sales of NFTs totaled just over $1 billion (£830 million) in June, according to the crypto research firm Chainalysis, their worst performance since the same month last year when sales were $648 million. Sales reached a peak of $12.6 billion in January.

The cryptocurrency market, worth about $3 trillion last November, is now worth less than $1 trillion.

There were a number of good reasons to add NFTs to their products. The technology seemed to have solved a long-standing problem for digital artists, that their work can be reproduced instantly and infinitely online, reducing its value. It appeared that artists might be able to capture the value of the work they create and share online if they were able to use non-fungible token.

The owners of blue chip collections like Bored Ape Yacht Club were given a measure of social status by the rising demand for NFTs. In September 2020, it was announced that users of the premium service, Blue, would be able to highlight their purchases with hexagon-themed profile pictures. It was in time for the market to peak.

Russia's invasion of Ukraine, rising inflation, crashing tech stocks, and plunging valuations of cryptocurrencies were all part of the story. People traded less of it if the value was less. For some high-profile cases in which too many people tried to get their money out, driving variouscryptocurrencies to seek bankruptcy protection

The cultural value of NFT collections seems to have gone down. ArtNet reported last month that some of the celebrities who had been pushing NFTs the hardest had quietly dropped them from their accounts. Serena Williams, Reese Witherspoon, Shonda Rhimes, and others are included.

What used to be chic, at least to a group of users on the social networking site, suddenly seemed cringeworthy.

Big teams were created by the social platforms to figure out how to integrate NFTs into their own products. A bunch of products that were entering development in January looked passe after several months.

Social networks have refused to acknowledge the decline of the digital currency. The companies' NFT product roadmaps seem to be largely intact, even out of optimism about the future or recognition of the sunken costs.

None of them agreed to talk to me about their NFT efforts. It is a measure of their confidence in the future of NFTs that they are at least releasing their showcases, however indifferent the user base seems to be to them so far.

NFTs have been positioned as a bedrock of the virtual reality metaverse it seeks to build. The fact that NFTs are owned by individuals means that they can be moved from service to service, platform to platform, creating a more consensual version of the internet.

"Ideally, you should be able to sign into any metaverse experience and everything you've bought should be right there." This kind of interoperability will deliver better experiences for people and larger opportunities for creators. The more places you can easily use your digital goods, the more you will value them, which will create a bigger market for creators.

Stephane Kasriel told the Financial Times that the company wouldn't modify its plans due to the crash. Meta sees an opportunity for hundreds of millions of people using our apps to be able to collect digital collectibles and for millions of creators out there that could potentially create virtual and digital goods to be able to sell them through our platforms.

Maybe that chance will come eventually. The basic idea of platforms is that people want to own unique digital objects, but the execution is wrong. Maybe they are too young.

NFT features are released by social platforms only to be met with a blank stare. As the downturn in tech leads to layoffs across the board, it is worth asking whether NFTs still deserve such a prominent place on the product roadmap, or whether they belong on the growing list of items these companies cannot afford.