It’s already clear as we head into 2022 that the social media market is ripe for disruption. Meta Platforms (NASDAQ:FB) faces regulatory scrutiny and Twitter (NYSE:TWTR) saw Jack Dorsey step down. Alternative social media and messaging platforms have been working hard to seize the resulting opportunities. DatChat (NASDAQ:DATS) has capitalized on the need for enhanced security on social media platforms. However, DATS stock has seen plenty of turbulence. The alternative social media company now seeks to venture into a digital security market of another type.
What’s Happening with DATS Stock
Yesterday saw DatChat announce the development of a Web 3.0 platform. This new initiative is designed to protect digital files and assets such as non-fungible tokens (NFTs). According to an official statement statement, it will “use DatChat technology as the foundation for a decentralized advertising network for Web 3.0 and Metaverse applications.”
This type of announcement sounds like good news.
Initially, it was for DATS stock. Following the announcement yesterday, shares shot up by as much as 42%. During after-hours trading, though, the stock experienced corrections and quickly began to lose momentum. It began today on a low note and things haven’t improved. As of this writing, it is down more than 8%.
Why It Matters
Despite the recent declines from DATS stock, investors shouldn’t be too quick to cast it off. Let’s take a closer look at the bigger picture.
The NFT market is absolutely booming, and as it grows, so does the demand for security. When headlines announced the digital theft of $2.28 million worth of NFTs, it’s hard not to notice. We’ve recently seen names such as Nervos Network (CCC:CKB-USD) and Pastel Network team up to provide options for those seeking safer ways to store their digital assets. To see this from a social media channel like DatChat, though, is reassuring. The company’s technology has already drawn attention for its efforts to secure personal information.
This initiative also encompasses both Web 3.0 and metaverse technology. In both areas, the potential for growth is strong and significant. As InvestorPlace Assistant News Writer Brenden Rearick noted, Web 3.0 is “already well on its way to shaping how we connect online.” He added that the technology exists to help restore power to the hands of users through decentralization. It certainly makes sense that a platform like DatChat would be drawn to it.
What It Means for DatChat
Additionally, the expansion of the metaverse will lead to expansions in the world of cryptos and NFTs, thereby creating more need for security. As metaverse gaming helps both crypto and NFT prices rise, the need for community is likely to grow as well. DatChat could have a unique opportunity to provide both a platform for storing digital assets and a venue for investors to stay connected.
DATS stock might have fallen victim to market corrections but it can absolutely find the momentum it lost again. Investors looking for Web 3.0 and metaverse plays should be watching.
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On the publication date, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.