Social news site Reddit is expanding further into the crypto space with platform-owned NFT profile images. The effort is part of a larger campaign to extend various Reddit functionalities through blockchain technology.
With the successful NFT sale in June 2021, when a set of four artistic interpretations of Reddit's Snoo avatar convinced with a sale price of up to 175 ETH ($234,000 USD at the time), the company was undoubtedly encouraged to further explore the technology's potential. Less than a year later, Reddit announced the launch of collectible avatars. The current Collectible Avatar NFTs are a conceptual extension of the company's first NFT collection, which was silently released in June 2021. To date, 90 collections have been created, each with several thousand unique pieces.
Avatars as NFTs
The new NFT project uses NFTs as avatars for the entire platform. These limited edition profile pictures (PFPs) are created by independent artists in collaboration with the company and offer unique platform benefits to their owners. The project is based on the proof-of-stake based Polygon blockchain and the avatars can be purchased at a fixed price with a credit card payment. This greatly simplified the entry process for newcomers, as users did not have to take a laborious detour through cryptocurrencies and external exchanges.
In addition, a series of airdrops distributed free Reddit NFT avatars to top members of the Reddit community. The criteria to qualify for the airdrops were not clearly stated. It is assumed that these free NFTs are only given to top redditors who have accumulated a high number of points through the Reddit Karma program.
The qualified users were shown a personal banner that let them claim the NFT directly. They had a choice of four different collections created on August 20, 2022. "The Singularity" is the most widely distributed with 13,950 unique pieces. "Aww Friends" and "Meme Team" were each minted over 5,460 times. Meanwhile, new avatars are created every minute and automatically listed on OpenSea. The avatars from the Reddit store all sold out at $10 to $100 USD. The artists of the motifs receive half of the creator fee every time an NFT is traded. Reddit pockets the other half of the 5% of the sale value.
Success in the bear market
Since the launch of the Reddit NFT marketplace in July, the number of Reddit Vault wallet users has grown at a remarkable pace. Before the new avatars were made available, about half a million wallets had been opened. By October, the number was already at three million, as Pali Bhat, Reddit's chief product officer revealed during a panel at TechCrunch Disrupt. Of those, over 2.8 million users have minted their own NFT avatar.
The easy onboarding via the avatar creator on Reddit, which has been available for two years, could be settled with well-known local fiat currencies. Once someone completes a purchase, they can use their avatar on Reddit. To store and manage Collectible Avatars, Reddit users use their Vault - a web-based polygon wallet. A Vault gives users a specific digital wallet address that works over the Ethereum-compatible blockchain; it's the same Vault where Reddit users currently store Community Points.
Reddit has an estimated 50 million daily active users. According to the company's own data, it took in more than $350 million last year. The enthusiasm for avatar NFTs in the bear market and the fact that they are already being monetized should boost revenues even further in 2022. Since the end of August, new collections have been appearing almost daily and trading briefly. On one day, the trading volume even exceeded the blue chips "Cryptopunks". The cumulative volume is now over USD 10 million.
