A Very Quiet NFT Rally
CoinDesk published an article yesterday to little fanfare about Instagram Digital Collectibles product that caught my attention — “Top NFT Artists Are Launching Projects on Instagram and Selling Out in Seconds”
We have been eagerly waiting for updates on the Instagram Digital Collectibles product since the announcement on November 2, 2022.
The ability to sell digital goods directly to audiences on Instagram’s social NFT marketplace is a powerful revenue channel for creators and artists on a platform with 2 billion monthly active users.
The big question for this product has always been whether NFT buyers would purchase digital collectibles on a centralized web2 platform.
The early answer is yes, users will buy digital collectibles on Instagram. In fact, the first collections have all sold out.
On January 8th, 2023. collection released on Instagram, Aku’s Dream Lab digital collectibles sold out in just 11 seconds.
While blockchain natives may have been skeptical of Instagram's foray into Web3, the platform's partnership with well-known NFT artists has helped instill confidence across communities. Drifter Shoots (aka Isaac Wright), Refik Anadol, Amber Vittoria, Dave Krugman and Micah Johnson have each launched NFTs through Instagram over the past few months, selling out each time. (CoinDesk)
Polygon is powering the NFT integration for Instagram. They are also partnered with Nike, Reddit, and Starbucks on their recent (and by all accounts successful) NFT product launches.
One of top NFT Solana projects Y00ts announced last week they will be moving to Polygon as well (Chapter One is an investor in Dust Labs which helped build Y00ts).
The “very quiet NFT rally” of Q1 2023 has seen strong growth and activity for the past few weeks.
On Thursday, the NFT market hit a 3-month high in both daily users sales count, according to data from Dune Analytics. A total of 88,000 sales were made by 20,000 users over the past 90 days, indicating a surge in interest in NFTs. (NFT Gators)
NFT volumes declined to $466 million in September 2022 (down 97% from January 2022 peak of $17 billion), but there is still significant capital and community interest in digital collectibles.
At Chapter One, Instagram’s NFT marketplace experiments for creators give us confidence in the longterm viability of this product. Revenue drives product roadmaps at public consumer tech companies.
While the data is still early, we can expect more investment in product development from the Instagram product team in 2023, especially as META (-58.88% YoY) searches for new monetization channels.
We were initially underwhelmed with the early NFT experiments at Instagram.
The first iteration of Instagram digital collectibles “NFT Sharing” focused on social sharing by allowing users to display their favorite NFTs in their profiles, and to also share their collectibles in newsfeeds with their friends, just like other photos.
This product unfortunately does not have strong utility for mainstream users. Most Instagram users have a social graph that is different from the people who would care about which NFTs they own.
Said otherwise, your Instagram friends (and the graph you’ve built over many years) are different from your crypto friends.
But with the NFT marketplace, Instagram has early signs of product market fit.
We also have a very quiet NFT rally. And in an industry where hype often exceeds reality, quiet is a good thing.