Reddit's NFT avatars have caused a storm across the crypto world. Not just an example of mainstream adoption, the digital collectibles also show how to make NFT utility accessible to the rest of the world. Ekin Genç brings insights from leading NFT collectors and traders to tell the story.
We thought we had seen it all. And it was not so inspiring.
Social media platforms Meta and Twitter began integrating NFTs. They seemed big on the surface, but those developments failed to make many – even the core web3 audience – bright-eyed and bushy-tailed in the end.
Big brands launched NFT collections based on their mascots, product designs, and logos. But after the initial excitement and subsequent trading frenzy, collectors have slowly abandoned them, pushing down the prices and killing off the vibe. CNN killed their CNN Vault project themselves. Could ‘mainstream’ have been overhyped?
As it turns out, there can be huge exceptions in the midst of a bear market. Reddit’s NFTs – or 'Collectible Avatars' as the discussion site called them – painted a completely different picture and offered a fresh playbook on the whole NFT business.
Reddit’s NFTs are limited-edition avatars of its mascot, Snoo. Reddit creators and independent artists designed a wide array of Snoo variations, and the social media site airdropped NFTs to its most engaged users in August, applying a classic web3 ‘community-first’ strategy to half a billion active users.
To claim the NFTs, Redditors had to create a Polygon-based NFT wallet called Reddit Vault – all on-site, a simple process that you could do in an instant. None of the classic crypto onboarding was necessary. Two months in, they have been an absolute success.
Reddit users created more than 3 million NFT wallets, according to Reddit’s chief product officer Pali Bhat. Polygon recorded a commensurate explosion in the number of NFT users. In one wildly popular variation, Reddit user poieeeyee created the golden Snoos collection Spooky Season, which has made it to this week’s top 10 trending collections on OpenSea. The top-selling avatar in the Spooky Season collection is Midas Touch #1, which most recently sold for 18th (£24,000). It sold to SamZFury, a collector who has only ever collected Reddit NFTs, illustrating how the collection has introduced new people to web3
What did Reddit get so right?
“The biggest problem plaguing web3 is the complexity, friction, and risk for NFT collectors,” NFT collector Nick O'Neill, better known as NFTNick, tells Culture3. Reddit solved that. “There's one lesson: better user experiences win.”
“Reddit eliminated 100% of the friction and the result was millions of new people onboarded to web3. More people became owners of NFTs in a matter of weeks than practically all of last year because of an effective user experience,” O'Neill explained.
“There's one lesson: better user experiences win.”
For industry insiders, Reddit has always felt like a distant place. The widespread sentiment is that Twitter is the beating heart of the industry – of those in the know – while Reddit is where the retail investor spends their time.
“I think an important lesson learned here is, especially if you’re into crypto, to remain engaged with communities on a wide variety of platforms,” says Mahesh Vellanki, managing partner at crypto venture studio SuperLayer. “Obviously, Crypto Twitter is really important for staying engaged with announcements and developments. But it’s clear that those who were not engaged with Reddit missed out on major developments there.”
According to Redditfloor, a site tracking Reddit’s NFTs, the total market capitalisation of the 86,000 Collectible Avatars exceeded $130 million this week. And it is just the beginning of Reddit’s journey into web3.
Reddit is also experimenting with Arbitrum, to bring its Community Points rewards programme onchain. Community Points function like in-app tokens, and are currently used on two subreddits, one for the wildly popular game Fortnite, where they are called Bricks, and the other for cryptocurrency, where they are called Moons. The network was recently connected to the Ethereum mainnet, allowing the tokens to be traded across the web3 ecosystem and their holders to be rewarded outside Reddit as well as within it.
There is much talk of NFTs going mainstream in the future. But that will not happen by itself, without design decisions conducive to mass adoption.
Reddit’s experience points to how mainstream adoption will look, said pseudonymous NFT collector and trader Loopify. “It’s about user experience, not the underlying technology,” they tell Culture3. “The marketing starts as simple as changing the terminology [and] smooth onboarding… and before [users] know it, they’ve created a wallet and purchased an NFT.”
The main utility of Reddit’s NFTs arrived well before they could be traded. Reddit avatars were already common on the site before they became ownable: the proof-of-concept was ready, and users were comfortable engaging with Snoo.
All people had to do was to claim their airdrop, which resembled an item that they were already familiar with. “Reddit did a key thing for onboarding users – they put the NFT content, or their avatars, on the front end for users and kept the technology on the backend. And that is hugely important for onboarding users into web3,” says Santiago Portela, CEO of FITCHIN, a Solana-based gaming platform.
“As innovative as the technology is, people will use it if it’s easy to use. That’s the key here. And that’s a big lesson learned from all this, and I think everyone in the industry is taking notes on this.”
“The marketing starts as simple as changing the terminology [and] smooth onboarding.”
Reddit’s success has also thrown the industry into a mild-identity crisis. Many on NFT Twitter suggested that it is perhaps time to jettison the term 'NFT' in favour of its less technical alternative, which has served Reddit well.
“I think it’s also a smart move that they refer to their NFTs as 'digital collectibles'. The ‘NFT’ phrasing at the moment has put some people off, so this is clever branding. Web3-native lingo needs to be branded for mass adoption, and that means dropping the tech talk and calling things what they are,” according to Daryl Kelly, founder of the NFT platform LTD.INC.
“This is just one milestone among many.”
Although the terminology may have played a role, Loopify stresses that there is more to Reddit's success than the terminology and the marketing. “I think the wrong way to look at this situation is just to ‘switch’ terms. People can call it different things, and they will, but it is an NFT at the end of the day,” he said, adding that “some may not be collectibles, some can be items, like tickets.”
“It will be called many things. We shouldn't ‘rebrand’ the whole term, because it misses the point.” Reddit’s success story lies in its user experience story, of which terminology is only one part.
Others taking note of Reddit’s success will find that there are many lessons to learn. “What's fascinating to watch is how Reddit is innovating on ways to onboard people to NFTs and crypto,” NFTNick said. “This is just one milestone among many that will occur over the next twelve to twenty-four months.”
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