Instagram enters NFTs months after they crash. Artists are cautious but hopeful.

As crypto winter descended, so did NFT sales. After a rush into mainstream culture and nearly two years of explosive growth that peaked in November, NFT sales failed to reach $1 billion in July for the first time since June 2021, down from more than $5 billion in January. Sales on OpenSea, the world’s largest NFT marketplace, fell 79% from May to July, and the company laid off 20% of its staff in mid-July.

But the NFT slump hasn’t stopped social media companies from launching new features this summer that seem built for the NFT-obsessed world of last winter’s crypto boom. Reddit, which had already been in the NFT space for more than a year, announced a marketplace for fixed-price NFTs it billed as “collectible avatars” on July 7. Snap is testing NFTs as AR filters, the Financial Times reported in mid-July. And just last week, Meta announced that Instagram would allow users in 100 countries to showcase NFTs on its platform. Through this feature, users can connect to their digital wallet and share NFTs from it as posts that automatically display public information about the NFT. The posts will have a shiny effect to set them apart from your average Instagram post. Facebook is set to follow suit.

Artists who make a living from digital art are hoping that all this interest from big companies despite a cratering NFT industry means that the market for their work will eventually return. But they also worry that with so many social media giants entering the NFT space, big brands and corporations will take over, leaving independent artists with less influence over the success of their art.

The odd timing of Reddit, Snap, and Meta’s new NFT features is likely due to the fact that they’ve been long-planned additions—and it’s hard to predict downturns in industries as volatile as crypto.

Sophia Wilson, an artist who worked with Meta in a small group of creators on the pilot for the new Instagram NFT feature, said Instagram first reached out to her in November 2021 — before crypto peaked and crashed — with plans for the project. “Obviously more people would have benefited if it was released during the boom, but this kind of thing can’t be turned around overnight,” says Wilson.

Edward Dowling, a product manager on the blockchain experience creation team at Meta, said Forbes via email that the company started working on the NFT features before the market’s peak last November, and that they are part of Meta’s goal to help creators make money in as many ways as possible.

Tim Rathschmidt, director of communications for Reddit, declined to comment on the timing of the company’s release during a crypto winter, but wrote that the company prefers to focus on “how the blockchain can benefit users and artists on Reddit … rather than the level of hype around a technology.” That may help explain why Reddit’s July launch of a fixed-price “collectible avatar” marketplace avoided the word “NFT” altogether.

Social media companies’ formal entry into the NFT space makes a lot of sense, given how integral social media platforms have been to NFT’s rise in popularity. Users, namely celebrities and influencers with millions of followers such as Bella Hadid, Paris Hilton and Snoop Dogg, helped drive NFT hype among the general public by sharing their NFTs on platforms such as Twitter and Instagram. In turn, social media has been instrumental in digital artists, big and small, trying to market their NFT work.

Some companies managed to catch the NFT wave while it was creeping. Reddit rolled out its own NFT marketplace at the peak of the boom last year, making it one of the first major social platforms to enter the space. TikTok and Twitter released features supporting NFTs in September 2021 and January 2022, respectively. Discord was also an early gathering place for NFT enthusiasts, although it eventually shelved plans for crypto-related features in response to concerns about NFTs’ high environmental impact (a digital artist calculated that mining a single Ethereum-based NFT used enough energy to power a house in the United States for nearly five days).

But until this summer, after the initial cloud of hype had passed, Instagram, Facebook and Snap had yet to do much product-wise to support NFTs. Some NFT artists told Forbes that they actually appreciated the timing of the release when the market is not as hot as it was this winter. When large, mainstream tech companies with billions of users support NFTs with new features, it can be an indication that NFTs are here to stay, a message reinforced by releasing them during a market downturn.

“If companies like Meta really go into it, it shows you that there’s longevity and stability,” says Jay Alders, a painter and NFT artist known for ocean-inspired work that blends surrealism, comic art and traditional painting.

He also joked about big tech’s NFT capabilities as an additional mainstreaming of the technology: “NFTs were like the new indie band in town that everyone loves, that only the cool kids knew about, and now everyone knows about it, and it’s not cool anymore .”

But his tip underlies a more serious concern: When something gets big, giant companies are going to want a piece — and Alders worries that “corporate conglomerates and big brands” are the ones who will get the most out of the new The NFT functions. Subsequently, individual artists may suffer, not benefit, from the updates, leading some artists to distrust Meta’s push into the space.

Australian artist Serwah Attafuah was previously wary of Meta’s entry into NFTs, but over the past few months she has come to appreciate Meta’s release of relatively small features during the downturn. Attafuah is happy that she can share NFTs on Instagram but still sell them through NFT auction sites like Foundation and OpenSea—the platforms that made selling digital art viable for her. She is not ready to leave these marketplaces just yet.

For example, one of Attafuah’s first NFTs, a surreal cyber-dreamscape of a feminine figure surrounded by fish, sold on Foundation in March 2021 for 10 ETH, or about $18,000 at the time — far more than the $50 she paid for some non-NFT digital artwork.

While Meta does not currently deduct fees from creators using Instagram’s NFT feature, it may from future NFT features on Facebook and Instagram, as a marketplace. According to CNBC, Meta plans to take a 47.5% cut of NFT sales in its virtual reality platform Horizon Worlds. OpenSea, on the other hand, takes 2.5%.

Meta’s plans to take such a big cut of NFT profits in that case embody the skepticism surrounding big tech’s entry into a space built on ideals of decentralization, whether that’s true in practice or not. OpenSea has dominated the market for the past two years, reaching a market share of 97% in March, although this figure has since fallen to 66%.

And Meta actually has plans to expand into an NFT marketplace, the Financial Times reported in January, which Alders called “inevitable” and “just what these companies are doing.”

Wilson, who often gets Instagram direct messages asking why it’s not possible to buy NFTs on Instagram itself, said it was the “logical next step.”

The wider access can be good for artists, Wilson said: The more mainstream the platform, the bigger the audience.

“We like it,” 3D artist and animator Clara Luzian says of Instagram’s NFT feature, adding that it makes it easier for artists to build an audience and opens up the world of NFT to people who are curious about it, but maybe didn’t know much about it before. Luzian is known under the stage name Renderfruit and for art that sweeps the viewer into fantastic dream worlds.

With such a large audience, it’s especially important that major social media companies lift up underrepresented artists when rolling out their NFT features, says Wilson. She sees it as an opportunity to change an industry currently dominated by white men, who received most of the wealth from last winter’s NFT boom.

Black utopia and female empowerment are key themes in Wilson’s work, and she was pleased to see that she was far from the only black person or the only woman in Meta’s cohort of 16 initial creator partners.

All five NFT artists who spoke to Forbes clings to the hope that the NFT market will either stabilize or become stronger again. They believe now is the time to double down on their approach and make the most of the tools – social media and others – available to them.

“I know it’s normal for it to go up and down,” says Luzian, who had several NFT projects delayed by the crash.

Michael Artis, whose groundbreaking work involves colorful butterflies representing the lupus that killed his mother and how he grew past the grief, feels the same way. “When everything goes back up, everyone’s going to rush to do everything again,” says Artis, who partnered with Reddit to create NFTs for the launch of collectible avatars in mid-July.

And even if the market doesn’t return to where it was last winter, Alders predicts that now that the “pump and dump” artists have left, NFTs still provide a good way for “the actual artists doing the real legit stuff” to sell their work, both on the likes of Instagram and Facebook and on the more traditional NFT auction sites.

“I’m very bullish on the technology of NFTs,” says Alders. “Now, when things start to turn into another bull run or into a more steady growth scenario, I feel like I’ll be put in a position I could never have had before.”