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Meta to pull NFT sales on Instagram: What it means for the NFT industry

When Meta announced its initiative allowing artists to sell NFTs on Instagram, it was seen as a positive development for the struggling NFT industry. Now that the tech giant has terminated the project, web3 enthusiasts have mixed reactions to the sudden move.

Dave Krugman, one of the first creators who was able to sell his art on Instagram through non-fungible tokens, expressed frustration over the decision. He called it “shortsighted” and said he was completely baffled by the move. Krugman has been making money online with his work for more than a decade, and has been building an audience on Instagram with nearly 320,000 followers.

Meta’s NFT feature allowed him to sell NFTs on the platform, interact directly with his audience, and avoid redirecting potential buyers to third-party marketplaces like OpenSea. Krugman did only one drop on Instagram of 100 NFTs at $50 a piece, which he said sold in under a minute.

However, less than five months after launching the initiative that allowed a select few “creators” to showcase and sell “digital collectibles” (NFTs) using Instagram, Meta is moving off of NFTs. Stephane Kasriel, Meta’s head of commerce & financial technologies, announced the pilot program was coming to an end on Twitter earlier this week. The following day, CEO Mark Zuckerberg said in a post to Meta’s website that the company planned to lay off 10,000 employees on top of the 11,000 people it laid off in November.

“We’re winding down digital collectibles (NFTs) for now to focus on other ways to support creators, people, and businesses,” Kasriel said on Twitter, adding that Meta is “going to focus on areas where we can make impact at scale, such as messaging and monetization [opportunities] for Reels.”

Meta’s decision means that, for the time being, one of the biggest social media apps in the world is putting off formally embracing digital assets, which are a key component of the next era of the internet known as web3.

Cutting Costs

Meta’s decision may be tied to its cost-cutting efforts during a transformative period at the company that Zuckerberg is calling the “year of efficiency”. The CEO has been under pressure ever since he began investing billions of dollars into a nascent metaverse amid intense criticism while simultaneously eroding economic conditions caused the company’s share price to plummet. Meta did not immediately respond for comment when asked if layoffs factored into the decision to sunset the NFT program.

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