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Meta’s entry into NFTs may help revive the industry

Meta’s entry into NFTs may help revive the industry
Photo Credit: 123RF.com
31 Aug, 2022
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Social media giant Meta has announced that it would start allowing creators to post their digital collectibles, such as non-fungible tokens (NFTs), on both Instagram and Facebook platforms. While Meta’s move has been in the works for a while, it comes at an opportune time for the industry, and could help revive interest from both creators and collectors.

Like the rest of the crypto market, the NFT market has also experienced a downturn in the last few months. According to data from blockchain tracking firm, DappRadar, trading volumes on OpenSea dropped by 99% in the last four months. India’s WazirX NFT Marketplace, too, has seen an over 85% drop in volumes in the past 30 days, according to DappRadar's data.

OpenSea is the largest NFT trading platform in the world, while WazirX’s NFT marketplace is the leading marketplace in India. The recent slump in NFT transactions due to the ongoing crypto winter has wiped close to $800 billion in market value in a month, according to CoinMarketCap. In June, NFT sales dipped to a 12-month low with a total of just over $1 billion, according to the crypto research firm Chainalysis. 

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Though creators still can’t sell or mint NFTs on social media at the moment, putting them out as profile pictures or posts on two of the world’s largest social networks could provide a huge push to the community, said industry experts. 

“It will be good for creators. Facebook and Instagram have huge user bases, which will be good for NFT creators and get them a lot of traction. It will enable them to build communities which are essential for the underlying value of NFTs,” said Sidharth Sogani, founder and chief executive of CREBACO, a crypto analysis firm.

Kameshwaran Elangovan, Co-founder and COO at GuardianLink, an NFT service provider, said that the convergence of social media and NFTs represents the “finest confluence between the crowd-power of Web 2.0 and the transparency of Web3.”

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“It is important for any new technology and its manifestations to mark a presence in a place where people hang around. And right now, there is no better place than social media,” he added. 

Facebook has 2.93 billion monthly active users (MAU) as of June, Meta said in its quarterly earnings call in July. In comparison, Open Sea has only 1.5 million MAUs, according to analytics firm Dune Analytics.

“The entry of more creators and buyers will revive the appeal of NFTs that have suffered an apparent loss because of the crypto bear,” said Elangovan. 

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Further, Amanjot Malhotra, the country head- India for crypto exchange Bitay, said that social media’s entry into the space could also increase transparency and ease-of-use to the NFT space. 

Sogani concurred and noted that while social media platforms don’t allow users to buy and sell NFTs at the moment, eventually they will do that too.