Meta ditches NFTs on Instagram and Facebook in metaverse reversal

Meta is walking back NFT support on Instagram and Facebook, which was an experiment that barely lasted a year, as the company slows down its push into the metaverse. On Monday, Stephane Kasriel, Meta’s commerce and financial technology lead, announced the deprecation of NFTs, which had been available to display on profiles on Instagram and Facebook.

“We’re winding down digital collectibles (NFTs) for now to focus on other ways to support creators, people, and businesses,” Kasriel said in a post on Twitter.

Last year, Meta CEO Mark Zuckerberg made the announcement that NFTs, or digital collectibles, were coming to Instagram, and later Facebook. Zuckerberg, speaking at SXSW in March 2022, discussed the benefits of NFTs and virtual fashion. At the time, NFTs were still a hot market, and startups and collector communities were riding the wave.

Now, as SXSW is in session again this year, Meta is dropping NFT support.

“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.”

NFTs have cultivated hardcore followings, mostly from crypto investors who believe the technology could help creators 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 caché, however, and marketers are using more accessible terms like “digital collectibles” and “virtual creations.”

Meta was not the only social media platform that embraced NFT creators. 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.

NFTs are considered a foundational technology for the future of the metaverse because they are unique assets that bestow ownership in the virtual world. 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. If a consumer buys a wearable NFT in one setting, the item is transferable to another setting.

Last year, 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.”

Still, the NFT market has been somewhat fraught with risk. 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.

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.

“Creating opportunities for creators and businesses to connect with their fans and monetize remains a priority,” Kasriel said in the Twitter thread about NFTs, “and we're going to focus on areas where we can make impact at scale, such as messaging and monetization opportunities for Reels.”