Brian, you put out a call for someone to explain the NFT backlash that Discord experienced the other day, and given that I happen to be part of a specific intersection of communities that all have different sides and takes on this, I'm going to try and explain this whole thing from beginning to end. Forewarning, a lot of this is based on first-hand experience, and I'm sure that it is not reflective of all who have taken part in these events, however, I do my best to try and stay informed about these topics. Apologies if there are any oddly placed sentences, I didn't really proofread this thing before posting.
tl; dr: The early NFT craze completely soured crypto permanently in the eyes of creators, as well as in the Ethereum communities.
The Bad Beginning
Before we even get to Discord, NFT self-promotion became a big issue in communities like /r/Ethereum wherein many expressed disdain for the amount of self-promotive posts that were nothing but a low-quality animation that someone was claiming to sell as an NFT. It became such an issue that after community outcry (and remember, this is within the Ethereum community itself), the mods eventually made a post announcing that they would curb the amount of NFT spam by removing these kinds of posts. In the months that have followed. Even after all of this, the Wallstreet Bets crowd and the bitcoin maximalist crowd have basically taken over the subreddit, to the point where hardly any meaningful discussion over development of the Ethereum protocol even takes place. What's more, the amount of work required to produce a single NFT on the mainnet is so high that gas fees have been ridiculous since the craze began. These events would ultimately lead to many of the technologically capable recusing themselves from crypto after the events that transpire in the next section.
The Immoral Introduction
Beeple selling his artwork on Nifty created a figurative gold-rush in what many now refer to as the NFT Community, and at that point, something that was overlooked by so much of tech journalism while they were looking at the high prices these tokens were fetching, was the amount of harm that was being done to small creators. On twitter, for example, a bot was created that made it easy to mint any small artist's post that got sufficient traction into an NFT. This was not being done to the benefit of the creators, but rather, anonymous accounts that were trying to pass the artwork off as their own in order to make a quick buck. For may, this was the first personal experience they had with the idea of an NFT as well as crypto more broadly. At least within the circle of artists I follow, many were devastated to see their art taken like that and being bought and sold for thousands of dollars while they saw none of it, especially when those buyers never cared about their work before. To make matters worse, many who were bullish on NFT art would drop into replies critical of this practice with "Um, actually..." comments, often factually wrong or else just very poorly reading the room, that quickly got them labeled as "Crypto Bros". On top of this, the generative nature of crypto art created skepticism within the artist communities that NFTs were anything more than a tax-avoidance scheme (as ugly-in-appearance high-end art is often considered by the general public), especially when arguments about "true proof of ownership" fell flat among artists who have been exercising use of copyright (especially among communities like furries who have been creating original art of personal characters for decades) from before blockchains even existed, and for whom proof of ownership has almost never been an issue. You can look into the "Canine Cartel" debacle if you want to see more about furries and their high involvement/distain of NFT art, and how impactful that all is (something something, furries make the internet work). Alongside these issues, many began passing around infographics showing the amount of power that is required to mint an NFT. Even if many of these these platforms use sidechains now with substantially lower energy requirements, the damage is done and many of these progressive and environmentally conscious artists want nothing to do with cryptocurrency ever again (some going so far as to outright ban anyone who had ever even talked about it before on twitter, something which did happen to me personally since I occasionally talk about tech topics).
The Ubisoft Unraveling
At the start of the month, Ubisoft announced that is has plans to introduce NFT-related content into its' games, making promises about unique ownership of in-game items which is already something that can be achieved by games without blockchains: see CS:GO, TF2, Rocket League, etc., and which (for a massive AAA game studio) just feels greedy when companies like them and Activision already make money hand-over-fist from their massively popular titles, while many independent game developers barely get by. Speaking of independent game developers, those who like the idea of NFT games have garnered such a reputation for themselves creating simple asset-flips with game concepts that sound closer to a pyramid scheme than actual gameplay that Steam has outright banned NFT-related games from their platform, much to the relief of every gamer that I know of. As for independent game developers who don't partake in NFT-related activities, remember that developers generally need to hire artists to develop concept art, texture, characters, models, music, etc., and artists tend to talk to each other a lot. Furthermore, independent games rely on streamers and other creators to spread the word about their games if they want to be able to pay the bills, and so once again, word spread further and NFTs became more hated within these communities.
The Discordant Development
Finally, that brings us to the events that happened recently regarding potential crypto-integration into Discord. While it is true that a lot of crypto talk goes on in discord, these groups are often looked at as unfavorably as people like Bezos and Elon are when discord is free and thus attracts a large general population of all kinds of different communities, many of whom skew young and have student debts, maybe a mortgage, or just general financial troubles, and all of whom despise the rich. There's a reason "seize the means of production" memes track so well among younger people these days when many of them have to worry about paying next months rent while others are spending money burning energy to produce a url that points to a randomly generated JPEG. Additionally, crypto scams are common on Discord, many of which are done in DMs, but due to the small-community nature of discord, people will warn others of these scams in record time, so they have developed a "reputation" among Discord users. Also important to these communities are the creators who formed many of them. Basically every big streamer, artist, and game developer will have one or more discord communities centered around their content, with creators on Patreon often having exclusive Discord communities for those who help support them. So now with all of these storms brewing, with how important Discord is to small creators, and with how many of those creators loathe NFTs and the crowd that is favorable to them, the revolt was inevitable. Now that the CEO has rolled back the claims, all of the communities that I know of are celebrating, but also preparing for another fight in the event that this is attempted again. Never underestimate the power of small communities.
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