As crypto winter rolled in, so did NFT sales. After a rush to mainstream culture and nearly two years of explosive growth that peaked in November, NFT sales fell short of $1 billion in July for the first time since June 2021, from more than $5 billion. dollars in January. Sales on OpenSea, the world’s largest NFT marketplace, fell 79% from May to July, and the company laid off 20% of its staff in mid-July.
But the NFT downturn hasn’t stopped social media companies from rolling out new features this summer that appear to be designed for the NFT-obsessed world of last winter’s crypto boom. Reddit, which had already been in the NFT space for over a year, announced a marketplace for fixed-price NFTs that it billed as “collectible avatars” on July 7. Snap is testing NFTs as AR filters, the Financial Times reported in mid-July. And just last week, Meta announced that Instagram would allow users from 100 countries to feature NFTs on its platform. With this feature, users can connect their digital wallet and share NFTs from it as posts that automatically display public information about the NFT. Posts will have a glitter effect to differentiate them from your average Instagram post. Facebook should follow suit.
Artists making a living from digital art are hoping that all this interest from big business despite a collapsing NFT industry will mean that the market for their work will eventually return. But they also worry that with so many social media giants entering the NFT space, big brands and corporations will take over, leaving independent artists with less influence over the success of their art.
The odd timing of new NFT features from Reddit, Snap, and Meta is likely because they were long-planned additions — and it’s hard to predict slowdowns in industries as volatile as crypto.
Sophia Wilson, an artist who worked with Meta in a small cohort of creators on her pilot for Instagram’s new NFT feature, said Instagram first reached out to her in November 2021 – before the crypto hit. its heyday and never crumbles – along with its plans for the project. “Of course, more people would have benefited from it had it been released during the boom, but this stuff can’t be reversed overnight,” Wilson says.
Edward Dowling, Product Manager of the Creator Blockchain Experiences Team at Meta, said Forbes via email that the company started working on NFT features before the market peak last November and that they are part of Meta’s goal to help creators monetize in as many ways as possible.
Tim Rathschmidt, director of communications for Reddit, declined to comment on the timing of the company’s release during a crypto winter, but wrote that the company prefers to focus on “how blockchain can benefit users and artists on Reddit… rather than the level of hype surrounding a technology.This might help explain why Reddit’s July launch of a fixed-price “collectible avatars” marketplace eschewed the word “NFT” altogether.
The formal entry of social media companies into the NFT space makes a lot of sense, given how integral social media platforms have been to the growing popularity of NFTs. Users, namely celebrities and influencers with millions of followers like Bella Hadid, Paris Hilton, and Snoop Dogg, have helped bring NFTs to the mainstream by sharing their NFTs on platforms like Twitter and Instagram. In turn, social media sites have been instrumental in helping digital artists big and small trying to market their NFT work.
Some companies managed to catch the NFT wave as it peaked. Reddit rolled out its own NFT marketplace at the height of the boom last year, making it one of the first major social platforms to enter the space. TikTok and Twitter released features supporting NFTs in September 2021 and January 2022, respectively. Discord was also an early gathering place for NFT enthusiasts, although it eventually abandoned plans for crypto-related features in response to concerns about the high environmental impact of NFTs (a digital artist has calculated that mining a single Ethereum-based NFT used enough energy to power a home in the US for nearly five days).
But until this summer, after the first cloud of hype passed, Instagram, Facebook and Snap hadn’t done much product-wise to support NFTs. Some NFT artists said Forbes that they actually enjoyed the timing of the release when the market isn’t as hot as it was last winter. When large consumer tech companies with billions of users support NFTs with new features, it could indicate that NFTs are here to stay, a message amplified by releasing them during a market downturn.
“If companies like Meta really get into it, it shows you there’s longevity and stability out there,” says Jay Alders, a painter and NFT artist known for his ocean-inspired work that mixes surrealism , cartoon and traditional painting.
He also joked about big tech’s NFT features as an additional integration of technology: “NFTs were like the new indie band in town that everyone loves, that only cool kids knew about, and now, everything everyone knows it, and it’s not cool anymore.”
But his quip underlies a more serious concern: When something becomes big, giant corporations will want a slice – and Alders fears “corporate conglomerates and big brands” will be the ones to get the most out of new features. NFT. Then, individual artists might suffer, not benefit, from the updates, leading some artists to be wary of Meta’s thrust into space.
Australian artist Serwah Attafuah was previously wary of Meta’s entry into NFTs, but over the past few months has come to appreciate Meta’s release of relatively minor features during the recession. Attafuah is happy to be able to share NFTs on Instagram while also selling them through NFT auction sites like Foundation and OpenSea, the platforms that have made selling digital art viable for her. It is not yet ready to abandon these markets.
For example, one of Attafuah’s first NFTs, a surreal cyber dreamscape of a female figure surrounded by fish, sold on Foundation in March 2021 for 10 ETH, or around $18,000 at the time, much more. than the $50 she charged for some non-NFT digital art pieces.
Although Meta does not currently deduct fees from creators using Instagram’s NFT feature, it may do so for future NFT features on Facebook and Instagram, such as a marketplace. According to CNBC, Meta plans to eventually reduce NFT sales on its Horizon Worlds virtual reality platform by 47.5%. OpenSea, on the other hand, takes 2.5%.
Meta’s plans to take such a big chunk of NFT’s profits in this case is an embodiment of the skepticism around big tech entering a space that was built on ideals of decentralization, whether that’s true or not. In practice. OpenSea has dominated the market for the past two years, reaching a 97% market share in March, although that number has since fallen to 66%.
And Meta indeed plans to expand into an NFT marketplace, the Financial Times reported in January, which Alders called “inevitable” and “just what these companies are doing.”
Wilson, who often receives direct messages on Instagram asking why it’s not possible to buy NFTs on Instagram itself, said it was the “next logical step”.
Broader access could be good for artists, Wilson said: The more mainstream the platform, the larger the audience.
“We love it,” 3D artist and animator Clara Luzian says of Instagram’s NFT feature, adding that it makes it easier for artists to build an audience and opens up the NFT world to curious but curious people. may not know much about it. before. Luzian is known as the artist Renderfruit and for art that draws the viewer into fantastical dream worlds.
With such a large audience, it’s especially crucial that major social media companies encourage underrepresented artists when rolling out their NFT features, Wilson says. She sees it as an opportunity to change an industry that is currently dominated by white men, who received the bulk of the wealth from last winter’s NFT boom.
Black utopia and female empowerment are key themes in Wilson’s work, and she was happy to see that she was far from the only black person or the only woman in Meta’s cohort of 16 partners. original creators.
The five NFT artists who spoke to Forbes remain hopeful that the NFT market will stabilize or strengthen again. They think now is the time to double down and make the most of the tools – social media and otherwise – that are available to them.
“I know it’s common for this to go up and down,” says Luzian, who has delayed several NFT projects due to the crash.
Michael Artis, whose seminal work involves colorful butterflies that represent the lupus that killed his mother and how he grew up after her grief, feels the same way. “Once everything is back, everyone is going to be rushing to do it all over again,” says Artis, who teamed up with Reddit to create NFTs for his collectible avatar launch in mid-July.
And even if the market doesn’t get back to where it was last winter, Alders predicts that now that the “pump and dump” artists are gone, NFTs still offer a good avenue for “the real artists doing the real, legit stuff.” to sell their work, both on Instagram and Facebook and on the more traditional NFT auction sites.
“I’m very optimistic about NFT technology,” says Alders. “Now, when things start to turn into a new bull run or a more stable growth scenario, I feel like I’m going to be put in a position that I never could have been before.”