Instagram has about 2 billion active users every single month, making it one of the most popular social media platforms in the world. Meta Platforms, the company’s parent, has been testing the sharing of non-fungible tokens (NFTs) since the beginning of 2017. During the test, a small number of users were given the ability to link their digital wallets and show off NFTs that they had created or purchased.
Creators and collectors of NFTs were excited about the possibility of reaching a wider audience of Web3-interested users with their digital works, which helped boost the popularity of the PFP NFTs. Expected backing from Instagram, according to some, might speed up the general use of non-fungible tokens.
Instagram’s Digital Collectibles feature was progressively expanded after positive feedback from its community. A desire to embrace the creative economy also prompted the company to allow a small group of digital artists to begin minting and selling NFTs directly on the platform.
Given Instagram’s massive user base, it only makes sense for it to offer NFT trading. Many users will be exposed to Web3 concepts for the first time thanks to this feature, all without affecting with Instagram’s main source of income. Instagram users can now buy NFTs with fiat currency, lowering the barrier of entry for newcomers to the Web3 ecosystem.
However, finding an audience that was raised on the Web3 might be challenging. Would experienced NFT collectors be willing to buy assets on a Web2 platform that is highly centralized? In addition, Apple and Google impose high fees of 15% to 30% on Instagram in-app purchases, cutting into the profit margins of the app’s sellers.
Regardless, NFT sales on the site started off well, and collections quickly sold out. Successful on two fronts, Instagram’s strategy of enlisting famous NFT artists to promote the new feature drew NFT collectors and helped bridge the gap between Web2 and Web3 users.
Attracting Web3 Developers
Blockchain natives may have been skeptical of Instagram’s entry into Web3, but the platform’s partnerships with well-known NFT artists have helped win over users everywhere. Instagram-based NFTs by Drifter Shoots (aka Isaac Wright), Refik Anadol, Amber Vittoria, Dave Krugman, and Micah Johnson have all recently sold out.
In an Instagram post advertising the release of his first NFT in November, Krugman noted that “Digital collectibles make a lot of sense when you consider where many of us do our social signaling.”
Famous NFT creators like Maliha Abidi and Bobby Hundreds have used the site to showcase their works as well, attesting to the feature’s usefulness as a means of getting in touch with potential customers.
“We’re stoked to usher in the feature, not only because it brings up the conversation of NFTs to the platform, but because it gives us the chance to re-educate the bright future we see ahead for NFTs and Web3,” Adam Bomb Squad, Bobby Hundreds’ NFT collection, said in a post showcasing one of its signature characters.
Existing Web2 companies that seek to use a Web3 toolkit sometimes find themselves in an awkward position. Not everyone is thrilled by their efforts to issue NFTs or buy land in the metaverse because they are seen as “PR stunts” catering to Web3 enthusiasts.
Towards a strategy for widespread implementation
Given the hoopla surrounding an image-first social network that embraces blockchain art, Instagram has taken care to integrate digital assets in a way that seems natural to both its mainstream audience and Web3 natives. Instagram users, for instance, can share NFTs in their feed just like any other photograph, but there’s also a dedicated tab for digital collectibles, giving them the best of both worlds in terms of content integration and isolation.
Since the layer 2 blockchain company’s stated goal is to serve as a “funnel” for Web2 firms making the jump to Web3, the platform is launching its Digital Collectibles features on the Polygon blockchain.
On the January episode of CoinDesk TV’s “First Mover,” Polygon CEO Ryan Wyatt said, “We’ve built this great funnel for partners to come through and make the onboarding to Polygon really seamless.”
Polygon’s recent partnerships with Nike, Reddit, and Starbucks have all proven to be highly profitable. Its comprehensive brand integration strategy and focus on simplifying the process for Web2 companies proved successful. Nansen, a blockchain analytics platform, reports that in the previous month, the daily number of buyers in Polygon’s NFT ecosystem broke all records.
Similarly, Polygon has found success with Web3 native brands, albeit at a cost. Solana’s top non-financial-transaction (NFT) initiative, Y00ts, has just shifted to Polygon with the support of a $3 million non-equity grant from Polygon to its parent company, DeLabs.
In the recent day, Nansen registered 823,000 unique active wallet addresses, making Polygon nearly three times as popular as Ethereum. However, compared to Ethereum NFTs, the overall trading volume of Polygon NFTs on the secondary market, where experienced NFT collectors go to sell their digital collectibles for profit, is minuscule. This is indicative of the low-cost blockchain’s general focus on onboarding new collectors as opposed to fostering projects for Web3 natives.
Some projects located in Polygon have chosen to distance themselves from the issues plaguing the cryptocurrency sector by rebranding as “digital collectibles” rather than “NFTs.” Those unfamiliar with crypto jargon find the word to be more approachable.
Instagram’s gradual shift to the Web3 has shown potential for Web2 companies making the move. It shows how NFTs and other crypto assets may be used to improve products and services while also providing an accessible entry point for curious Web3 users, all without alienating the Web3 natives who have supported the NFT sector from the start.