Social media giant Meta halts NFT support amid poor reception

Social media giant Meta has announced that it will wind down support for non-fungible tokens (NFTs). The company said it was currently focused on priority areas and would explore more avenues to support businesses, people, and creators.

Meta winds down support for NFTs

The head of Commerce and FinTech at Meta, Stephane Kasriel, tweeted about this development, saying that the company was currently assessing the areas that needed priority and would focus on these areas.

“Let me be clear: creating opportunities for creators and businesses to connect with their fans and monetize remains a priority, and we’re going to focus on areas where we can make an impact at scale, such as messaging and monetization opps for Reels,” Kasriel said.

Meta ventured into NFTs when the hype around these digital collectibles peaked. NFTs are digital certificates used to prove the ownership of digital goods stored on a blockchain. The NFT hype exploded in 2021, and at the time, multiple companies announced that they would explore the sector.

However, this hype quickly transformed into a “bubble,” with some collections attracting millions of dollars. Most NFTs are priced in cryptocurrencies, and after the bear market that rocked the crypto industry last year, the valuations of these collectibles in fiat value plummeted. Additionally, trading volumes in the NFT space dropped.

The NFT space tends to perform in tandem with the broader cryptocurrency market. Therefore, after multiple negative events that rocked the crypto sector in 2022, such as the collapse of Terra LUNA, FTX, and other firms, the NFT sector was affected, and most tokens lost their value.

Meta has many users globally, with the majority not conversant with the nature of the crypto and NFT market. According to Kasriel, despite Meta’s vast user base, most users have yet to venture into the NFT space, making this product not worth considering.

Meta looks to compete against TikTok

Integrating NFTs into Meta was part of the company’s plan to boost its competitive edge against other social media platforms, such as TikTok. Besides NFTs, Meta also integrated the “Reels” feature to attract more users as TikTok was rapidly affecting Meta’s audience and advertisers.

Meta’s revenue was affected by competition from TikTok and other social media platforms, an unfavorable economic climate, and Apple introduced privacy changes to its iOS operating system. The social media giant is being forced to make rapid changes to prevent more loss of revenue.

Earlier this year, Meta announced plans to have a “Year of Efficiency” to turn around its business. The company also announced thousands of layoffs and a plan to allow paid accounts for creators and people who made a living from its platforms. These paid accounts mimic a model adopted by Twitter under the new ownership of Elon Musk to have users pay to be verified.