Even with cryptocurrencies banned in China, some of the top retailers held fast on non-fungible tokens (NFTs), which weren’t quite covered by the law, although reselling them for a profit was banned.
Now Tencent has given up, shutting down its marketplace for them altogether, and will probably shutter Huanhe, the unit that mints and distributes NFTs. That comes on the heels of a broader crackdown, with social media giant WeChat banning accounts that even mention NFTs and other digital assets.
See also: China’s Tencent to Shut Down NFT Platform
China isn’t the only place where the NFT business had a big loss this week.
Minecraft, one of the largest massively multiplayer online (MMO) games, with 141 million monthly active users (MAUs), announced on July 20 that it was banning NFTs — and any blockchain technology on its platform — news that will have a significant impact on the broader gaming community’s love-hate relationship with the one-off cryptocurrency tokens.
Many hardcore gamers are hostile to NFTs, which they see as more of a way for game developers to squeeze extra money out of them, as well as a potential source of purchasable in-game items that give buyers an advantage — called pay-to-win, which is decidedly not a compliment.
Read more: Gaming’s Backlash Against NFTs Is Becoming Organized, Threatens Crypto Tokens’ Adoption
In a blog post, Minecraft developer Mojang Studios explained that its user guidelines require that “all players should have access to the same functionality,” explaining the issue as one of inclusion and equal access. “The speculative pricing and investment mentality around NFTs takes the focus away from playing the game and encourages profiteering, which we think is inconsistent with the long-term joy and success of our players.”
Beyond that, it said, no developers will be permitted to introduce any blockchain technologies into Minecraft or to create skins — changing the appearance of a player’s avatar — in-game items, mods or any other “scarce digital asset.”
It also pointed to potential scams like wash trading to artificially inflate the value of NFTs, as well as “rug pulls” by developers who take money and abandon projects. Interestingly, it didn’t mention the high energy use and subsequent pollution of a number of blockchains — a common complaint of NFT opponents.
Marketers Still Love NFTs …
The brand marketing industry has embraced NFTs strongly, both as standalone items and as a way of sticking a “me-too” toe into the metaverse and Web3.
See here: Since When Is Dropping an NFT Care Bears Collection a Web3 ‘Strategy’?
Membership and loyalty program startup Hang has been able to attract a number of major brands including Budweiser, Pinkberry and the Bonnaroo music festival to use NFTs as a way increase sales and brand loyalty by offering people who reach new loyalty program levels limited edition NFTs that may also have resale value on NFT marketplaces.
Also see: Big Brands Replacing Membership, Loyalty Programs With NFTs
… And So Do Thieves
Yuga Labs, developer of the most valuable NFT collections, Bored Ape Yacht Club (BAYC) and CryptoPunks, tweeted out a warning that its “security team has been tracking a persistent threat group that targets the NFT community.”
Warning that a “coordinated attack targeting multiple communities via compromised social media accounts,” the company asked owners of its avatars — which are still attracting occasional million-dollar sales prices despite a broader NFT industry slump — to be vigilant.
Which is likely cold comfort to actor and TV producer Seth Green, who had to spend several hundred thousand dollars to buy back a stolen Bored Ape NFT that he was in the process of turning into the main character of a TV show he was producing.
Also read: Seth Green’s Kidnapped Bored Ape Shows NFTs’ Growing Commercialization
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