This Week in the Metaverse: Meta makes deep cuts and NFT sales drop 60%
Things are moving fast in the metaverse, and in the wider world of web3 as a whole. Here’s what you need to know from this past week:
In addition to implementing a budget cut and hiring freeze, Meta has scaled back its NYC expansion plans / Adobe Stock
Meta rolls back NYC expansion plans and plans first-ever major budget cut
Meta Platforms plans to terminate the lease at its 225 Park South office location in New York City, per reports. News of the upcoming closure arrives on the heels of a grim milestone for Meta: last week, the company’s founder and chief executive Mark Zuckerberg announced the first major budget cut in the nearly 20-year history of the company (which was originally founded as Facebook in 2004), plus a hiring freeze and expected layoffs that will likely leave the company with a smaller workforce in 2023 than it has currently, according to Bloomberg.
Meta has recently been spending vast amounts of capital in its efforts to be a prime mover in the metaverse, a gamble which may or may not pay off. In the final days of September, the company’s stock hit its lowest point since 2019.
Advertisement
Tim Cook casts doubt on the future of VR and underscores enthusiasm for AR
Apple chief executive Tim Cook has some doubts about the long-term appeal of the metaverse and virtual reality (VR). The tech billionaire told Dutch publication Bright that “it’s important that people understand what something is ... I’m not sure the average person can tell you what the metaverse is.” While he acknowledges that VR is “something that you can really immerse yourself in,” he adds that he doesn’t “think you want to live your whole life that way.”
Instead, he’s placing his bets on augmented reality (AR), which he described in the Bright interview as “a profound technology that will affect everything.” Apple is expected to release its much-anticipated AR headset – which reportedly will also include some VR capabilities – as soon as next year.
Cook isn’t the only tech magnate who has rained on the metaverse parade. Snap chief executive Evan Spiegel, who’s also been pushing his company in the direction of AR rather than VR, recently told The Guardian that the concept of the metaverse is “pretty ambiguous and hypothetical.”
Advertisement
NFT sales drop sharply in Q3
The non-fungible token (NFT) market continues to nosedive amid the ongoing “crypto winter.” NFT sales were down around 60% in the third quarter of 2022 compared to the previous quarter, according to a Reuters report published earlier this week. The report, which cited data from blockchain data tracker DappRadar, said that NFT sales tallied at around $3.4bn in Q3, compared to $8.4bn in Q2 and $12.5bn in early 2022, which marked a high point for the NFT market.
Shaky economic conditions prompted many investors to abandon risky crypto assets earlier this year, sparking a general decline in the crypto market.
FSOC report calls on Congress to crack down on crypto
A new government report is urging Congress to impose regulations on the crypto market in order to protect the stability of the US economy. The 124-page report, published on Monday, was compiled by the Financial Stability Oversight Council (FSOC), a panel comprised of leading financial regulators that was created as part of the Dodd-Frank Act following the financial crisis of 2008.
“Crypto-asset activities could pose risks to the stability of the US financial system if their interconnections with the traditional financial system or their overall scale were to grow without adherence to or being paired with appropriate regulation, including enforcement of the existing regulatory structure,” the report says.
The FSOC, part of the Treasury Department, compiled its report in response to president Joe Biden’s ‘Ensuring Responsible Development of Digital Assets’ executive order from March of this year. The order called for a “whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.”
The report offered many suggestions for potentially effective strategies for regulating the crypto market, including that Congress pass legislation to give federal regulators “explicit rulemaking authority ... over the spot market for crypto-assets that are not securities.”
Suggested newsletters for you
Celsius execs withdrew over $40m in crypto before freezing customer withdrawals, per court documents
New court documents reveal that two former executives and one current executive from the crypto lending company Celsius Network withdrew a cumulative $42.13m worth of cryptocurrency shortly before the company froze all customer withdrawals and filed for Chapter 11 bankruptcy earlier this year.
According to CoinDesk, which broke the news early this morning, Celsius’s former chief exec Alex Mashinsky withdrew around $10m in crypto; the company’s former chief security officer Daniel Leon and current chief technology officer Nuke Goldstein withdrew around $11m and $20.8m, respectively. Celsius reported that Mashinsky resigned from the company last week, followed by Leon on Tuesday.
Celsius filed for bankruptcy in July, an event that some were calling crypto’s “Lehman Brothers moment,” in reference to the collapse of the major Wall Street firm during the earliest days of the 2008 financial crisis. The company reportedly owes its users around $4.7bn and does not have the funds to repay them.
For more, sign up for The Drum’s Inside the Metaverse weekly newsletter here.