As Mark Zuckerberg announced at SXSW, Instagram now supports NFTs. But it’s happening during one of the biggest downturns in crypto history.
Digital Music News reported that Meta would bring support for NFTs to Instagram just a few months ago. Now the feature is here as creators and collectors can share their digital collectibles on Instagram. Here’s how Meta says the system works.
- Connect a digital wallet. Users can share which NFTs from their wallet they’d like to display on Instagram.
- Share digital collectibles. Digital collectibles will have a shimmer effect that can display public information, like a description of the NFT.
- Automatic tagging of creator and collector. Both collector and creator are attributed on Instagram on any post displaying the NFT.
Meta says it collects and organizes public data from open blockchains like Ethereum to provide the attribution feature. “From this public blockchain data, we can only identify which collectibles belong to collectors and creators when they connect their third-party wallets to Instagram,” the announcement reads. Supported blockchains at launch include Ethereum and Polygon, with support for Flow and Solana coming soon. Meta says there will be no fees for posting or sharing a digital collectible on Instagram.
So what’s changed between the SXSW announcement and the Instagram NFT launch? The crypto market as a whole has shed nearly 60% or $1.7 trillion in the last three months. Crypto exchanges like Coinbase have announced layoffs of 18% of its staff, including new hires. In a blog post announcing those layoffs, CEO Brian Armstrong wrote the company is planning for a ‘crypto winter’ that could last for an extended period.
Cryptocurrencies are well-known for their boom and bust cycles, but NFTs are relatively new. It’s hard to gauge whether there will still be interest in displaying Bored Ape Yacht Club NFTs that have shed more than 80% of their value since the height of their popularity last year.
A combination of events have impacted the markets, too. The Federal Reserves’ raising of rates has investors taking their money out of the more risky crypto market. Russia’s invasion of Ukraine also impacted the supply chain in a variety of ways. In May 2022, the Terra stablecoin ecosystem collapsed. In June, popular crypto lender Celsius announced it was pausing all withdrawals due to ‘bank run’ conditions.