There’s little doubt that we’re in a bear market and the NFT markets are down as well. NFT transaction volume and frequency is down by about 86%, according to nonfungible.com.
Even the “blue-chip” NFTs like Bored Ape Yacht Club and CryptoPunks are not spared as holders experienced a drop in value with the drop of Ethereum price.
In the midst of a slowing NFT market, Reddit NFTs became a sleeper hit, clocking $8.9M sales:
If you’ve stumbled upon Reddit NFTs and are wondering what the hype is about, this article is for you.
But first up;
What is Reddit?
Reddit claims to be “The Front Page of the Internet”.
It is a community driven forum and news website where content is curated by users through a voting system – this allows the best content to surface on the platform. It splits interest and topics into subreddit. There are more than 130,000 subreddits at the point of writing, so anyone can find a community for their interest.
According to Business of Apps, Reddit has 52 million daily active users and a revenue of $350M in 2021.
In recent years, Reddit has evolved into the unofficial search engine of the web as searchers develop a new way to search for authentic answers and to find communities.
What are Reddit NFTs?
Also known as Reddit’s Collectible Avatars, the bulk of these NFTs were released on 7 July 2022 and only sold out in October.
Redditors have been known to publicly throw hate on NFTs.
But the way Reddit did their launch was rather interesting. They developed their own marketplace and wallet (aka Reddit Vault) which can be created easily through the Reddit app. Then, onboarded their most engaged users and airdropped them free collectible avatars in August. This created a buzz initially as users started sharing and talking about their cool looking avatars.
Later, 40,000 Collectible Avatars were released at prices between $10- $100 and can be bought directly using a credit card.
These NFTs are hosted on the Polygon network and feature low fees.
Since Reddit’s Collectible Avatars caught the attention of NFT collectors, Polygon’s token, MATIC has also seen a boost in price (up 4.45% since July):
At the point of writing, Reddit has sold out a new collection of avatars created around the Halloween theme.
What can these NFTs be used for?
These Collectible Avatars are mainly used as…well, Avatars.
Although Reddit could add more features in the future, there is little “real world” usage nor any fluffy roadmaps currently.
So what?
While the potential to flip these NFTs is enticing, what’s getting the crypto community excited with Reddit’s success is the optimism it signifies.
Since the launch of Reddit Vault in July, over 3 million wallets have been created. In comparison, OpenSea, the largest and most popular NFT marketplace has about 1 million active wallets.
OpenSea was launched in 2017 and have been one of the go-to NFT platforms, serving the community through the hype cycle in 2020 and 2021. Seeing how Reddit had surpassed OpenSea in terms of the number of wallets gave the NFT community something to cheer about in this bear market.
That said, others have chimed in saying that many of Reddit’s wallets could be duplicates from a single user trying to get the NFTs while others opined that many of the users may not grow into active NFT users as they are only interested in a nicer looking Reddit Avatar.
…and what can you do?
The Reddit NFTs have sold out, the boat has sailed, so you can’t buy or mint new ones now. However, you can get them on the secondary market via OpenSea. (Not financial advice, I wouldn’t buy it now that the hype has pushed prices up).
These Collectible Avatars tend to be released in series, with the latest Halloween themed series. You can stay tuned for future series via Reddit’s avatar shop.
If you’re already active on Reddit, you can set up your Reddit Vault easily via the Reddit mobile app in 4 steps:
Beyond Reddit NFTs
Reddit is a private company at the point of writing although rumors of an IPO has always floated online. Hence, there are a few interesting developments that come alongside the success of Reddit’s Community Avatars.
Let’s take a quick look:
Reddit Vault and marketplace
According to their documentation, Reddit will charge a 5% fee on primary sales and 50% of the 5% royalty fee on any secondary market sales.
Most notably, Reddit’s relatively quiet success with its marketplace suggests that social media platforms can do well in the cryptocurrency space. (ahem, Meta…)
Reddit Community Points
On top of its marketplace, Reddit has also announced a pilot program around “Community Points” which allows users to earn Points by contributing to the community. These Points can be used to reflect the reputation of a user within a subreddit and also open up the option of Special Memberships, which could allow subreddit owners to finally monetize their community.
These Community Points are tokens built on Ethereum, and are separate from the existing Reddit Coins which users can already buy using cash.
It is still in Beta and many details are not released. However, it feels like Reddit’s version of Creator Tokens which allow subreddits to own their micro-ecosystem of coins.
Conclusion
Redditors hated NFTs and its NFT subreddit was deemed as one of the most toxic corners of the platform. But it seems that the company has done its research and managed to introduce its Collectible Avatars in a friendly manner – allowing folks to buy the initial avatars with cash between $10 – $100.
Reddit’s current monetization model is through ads, premium membership plans and through the sales of coins.
NFTs aside, the success of Reddit’s Collectible Avatar and the growth of Reddit Vault signals that the company could unlock more monetization methods in the future, which could be something that potential shareholders might want to note.