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The Image component page contains a section "GIF and WebP support on Android" that says:
When building your own native code, GIF and WebP are not supported by default on Android.
You will need to add some optional modules in android/app/build.gradle, depending on the needs of your app.
However, Fresco's docs say that static WebP images have been supported by default on Android since 4.2.1. RN's docs should be updated to point this out.