Telegram to allow users convert digital gifts into NFTs
With a new feature that lets users convert digital gifts into blockchain-based assets, Telegram is making its first significant move into the NFT market.
As Telegram's Gifts feature was introduced, CEO Pavel Durov teased an upcoming non-fungible token (NFT) conversion feature. The NFT conversion option will go live by the end of 2024, according to Pavel Durov, the platform's CEO, further extending Telegram's entry into Web3 technologies and digital ownership.
Gifts, which can be used to congratulate Telegram contacts with personalized messages and animated artwork, was unveiled on the instant messaging app on October 5. Telegram claims that users can showcase gifts on their profiles under the Gifts tab. They can also choose to turn the gift into Stars.
On June 6, Telegram launched Stars, an in-app currency. The feature enables the platform's Mini Apps to take payments for digital services.
NFT Conversion
Durov announced on the platform that the animated artwork would soon support NFT conversions. Durov said users will be able to trade and auction these tokenized gifts outside of Telegram, with ownership documented on the blockchain.
Telegram's endorsement of NFTs amid sales drop
The NFT market, which was once heralded as the cutting edge of digital collectibles and ownership in the gaming, entertainment, and art industries, is still confronting more and more difficulties. The industry is in an uncertain position as a result of regulators focusing on platforms and marketplaces as sales and transaction volumes decline.
The overall market saw its lowest sales volume since 2021, despite the Telegram ecosystem's apparent desire to support NFTs.
NFTs' monthly sales volume in September was $296 million, the lowest since January 2021. The number is an 81% decrease from March, which was the space's best month so far this year. Declining sales volumes were accompanied by a 32% monthly drop in NFT transactions. Digital collectibles transactions decreased from 7.3 million in August to just 4.9 million in September.
Regulatory Pressure
Increased regulatory action against the NFT market is occurring at the same time as a decline in NFT sales and transaction volumes. The Securities and Exchange Commission (SEC) and other United States regulators have increased their scrutiny of NFT platforms, and OpenSea and other significant companies are now the subject of investigations and enforcement actions.
The SEC is worried that NFTs might be categorized as securities, which would put them under much more stringent rules. The industry as a whole is concerned about this since platforms might have to modify their operations to adhere to current securities regulations.
Disclaimer
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