While the crypto markets continue to slump as we approach the beginning of winter, NFTs have suffered a similar fate as well. Volumes across major marketplaces are now shells of their former selves, as are the floor prices of popular blue-chip collections such as Doodles and Cool Cats. However, over the past few weeks, an unlikely collection of JPEGs have taken the NFT space by storm - Reddit’s digital collectibles.
Reddit’s first NFT collection was just 4 one-of-one pieces that were sold for upwards of $260,000. However, since then, the platform has launched multiple other NFT collections, all featuring their very own mascot Snoo, expanding across an extremely broad range of themes and styles to cater to various Redditors. While these new collections were launched just a few months ago in July 2022, only recently have secondary sales surged through the roof, reaching almost $10 million since their launch.
It’s been a while since we’ve seen this level of mainstream attention towards NFTs, especially by people who aren’t in the crypto or Web3 space at all. According to Reddit, over 3 million wallets were created by Redditors just to pick up these collectible avatars. But what exactly is so special about these NFTs, and why is everyone going crazy about them? Let’s dive in!
Reddit’s Crypto Affair
Before we dive into why Reddit NFTs are absolutely tearing through the ranks of OpenSea, it’s important to establish the platform’s relationship with cryptocurrency. Reddit hosts a diverse community of groups or “subreddits” that discuss a broad range of topics, including r/CryptoCurrency since 2013. So it’s no surprise that the platform has had a much more open attitude towards the crypto space compared to other social networks, though it wasn’t all a bunch of roses.
Going as far back as 2013, Reddit teamed up with Coinbase and began accepting Bitcoin as a form of payment for purchases on their platform. However, the option has since been removed in 2018, due to high transaction fees as well as concerns regarding the launch of Coinbase Commerce at the time. There are also sections of Reddit that were not in favor of crypto and tokens and weren’t afraid to be vocal about it on the platform.
However, this didn’t seem to deter the platform with their experiments. In 2020, Reddit launched its Community Points program, where users of different subreddits can earn rewards for their contributions in the form of transferable tokens. Functioning similarly to Reddit’s Karma system, these Points are distributed monthly based on the reputation and contributions made by community members towards a particular subreddit. Additionally, these points can be redeemed for special memberships and also acts as a form of governance to vote on significant decisions within the subreddit.
The Community Points were actually ERC20 tokens on Ethereum’s Rinkeby testnet. To collect and store these different assets, Reddit introduced its own crypto wallet known as the Reddit Vault. As of the time of writing, only 2 subreddits had their own tokens - r/Cryptocurrency’s Moons (MOON) and r/Fortnite’s Bricks (BRICK), both of which were tradeable and carried real value, despite only existing on a testnet. However, with plans to expand the program, Community Points have since been migrated to Arbitrum Nova in August 2022. Within the same month, Reddit had also partnered with FTX to allow Redditors to purchase Ether (ETH) directly through their site.
If you’ve followed us this far, it’s quite apparent that Reddit has always been actively experimenting in the crypto and Web3 space. As the NFT season went into high gear last year, it was only natural for the content platform to take the next big step of releasing its own collection of NFTs. But how did a simple series of unique mascots turn into a fully-fledged in-app marketplace where creators could launch and sell their own unique versions of Snoo?
The Creation of Cryptosnoos
Initially launched in July 2021, Reddit’s first and primary collection of NFTs, known as the CryptoSnoos, features their alien mascot in various settings with unique designs. These NFTs come in varying levels of rarity, including limited editions, as well as legendary NFTs that are one-of-a-kind. Besides just being a fancy avatar to show off to other Redditors, the NFTs will also appear on the owners’ Reddit comments with a glowing animation.
Legendary CryptoSnoos
To date, Reddit has minted four legendary NFTs on Ethereum and put them up for auction, with the final bids reaching astronomical prices. For example, the most expensive version, the Original Block, which features a pixelated version of Snoo, was ultimately sold for 175 ETH, approximately $400,000 at the time. At the moment, it’s practically impossible to get one for yourselves, even on the secondary market, as none of them have been listed. However, Reddit may release more CryptoSnoos in the future so keep your eyes peeled.
Interestingly enough, this would be the first and last time that Reddit would use the term ‘NFTs’. In subsequent collections, the platform referred to them as ‘Collectible Avatars’, which in hindsight, was probably for the best. NFTs were still being vilified by most communities (especially so-called environmentalists), while collectibles are a more familiar term that resonates well with pretty much everyone that has had a collection of items at one point in their life. Fundamentally, these collectibles are NFTs built on blockchains, yet by applying a different term, it seems to have completely changed the perception of even some of its detractors.
In August 2022, Reddit released its next set of collectibles that were airdropped to their most loyal contributors. As part of this drop, top Redditors with the highest Karma points would be able to claim an NFT of their choice. Unlike most platforms that boldly highlight their airdrop with big and colorful banners on their webpage, Reddit rolled it out rather subtly, showing eligible users a banner to claim their NFT in between Reddit posts as they scroll through the site.
Source: r/CryptoCurrency
Unlike the first few CryptoSnoos, which were 1-of-1 NFTs, qualified users were free to claim their NFTs in one of four different styles - The Singularity, Aww Friends, Drip Squad, and the Meme Team. Just like your typical profile pic (PFP) NFT collections, each user will receive an NFT based on their selected style but with completely different elements that make each one unique. Besides that, these NFTs are minted on the Polygon network instead of Ethereum.
To top it off, users will also be able to mix and match different parts from each individual NFT from their collection using Reddit’s Avatar Builder to create an entirely unique character. To date, ‘The Singularity’ version has been the most popular - Featuring Snoo in various robotic forms with cybernetic elements, NFTs of this variant have been minted by over 1.2M Redditors.
Source: OpenSea
Apart from the four collections that Reddit published themselves, the platform also tapped on their beloved community creators to create additional PFP collections too, which proved to be even more popular among users. Designed by selected artists from various subreddits, each new season features a different cohort of artists. Each collection is limited in number based on the artist, costing anywhere from $10 to $100, and they can all be directly purchased from Reddit’s own Collectible Avatars marketplace.
Source: Reddit Collectible Avatars Marketplace
While the first season of avatars did not receive as much attention initially, their second season, aptly named Spooky Season, was completely sold out in less than 2 days. Featuring 27 collections consisting of various Halloween and horror elements, that’s well over 30,000 digital avatars sold! Since users had to use ETH to purchase these NFTs directly through Reddit, it’s even more impressive that they went through the trouble of loading up their Reddit Vaults just to participate in the mint.
Although the original CryptoSnoo NFTs were never meant to fly off the proverbial shelves, it is apparent that their newest iterations of airdropped and creator-made collections have become a hit among the wider Reddit community, and for good reason. Reddit’s Avatar program was never meant to be exclusionary - everyone can create and design their own avatar to their liking. The collaboration with creators who truly understood Reddit’s culture and lingo fostered an even greater sense of community among Redditors, empowering creators and allowing users to support them by purchasing their work.
Purchasing an avatar just meant that you had more options to create something truly unique, either by buying a unique piece drawn by your favourite artist or customizing your default Snoo using different wearables. Moreover, unlike your usual PFP NFTs which are often sold at exorbitant prices, these collectibles are much more affordable. For most Redditors, it’s barely discernible from purchasing in-game skins or premium content. The fact that these avatars were also on Polygon made them cheaper to obtain without the need for paying high transaction fees.
Yet, not all avatars were made equal, and some are just much rarer. With this factor in mind, it’s not surprising to see why plenty of Redditors (and NFT enthusiasts) are willing to spend so much for a single avatar.
The Surge of the Snoos
Since pretty much all of the available collections have been sold out on Reddit itself, the only way to get these avatars for yourself is through the secondary market on OpenSea. However, the growing hype and attention around Reddit NFTs, exacerbated by the focused attention of Crypto Twitter, had resulted in floor prices for almost every community-created collection ballooning overnight.
Although the airdropped collections saw a noticeable uptick in volume, there was little price action and volatility thanks to their increasingly abundant supply. At its peak, over 400,000 NFTs were minted over the last two days of August 2022. These days, that number has reduced significantly by over 97%, averaging at just 10,000 new NFTs generated daily. Even so, floor prices have remained relatively stable, hovering just between 0.01-0.02 ETH (~$40).
Source: Adapted from @polygon_analytics Dashboard
On the other hand, the creator-made collectible avatars have had a completely different trajectory. Total secondary sale volume started out fairly low during the end of September 2022 but slowly began to ramp up, reaching $300k in early October. Although sales began to slow down soon after, it was merely the calm before the storm.
Volume quickly began to pick up again as Halloween drew closer, largely thanks to the newly released series of Spooky Season collectibles. The last week of October saw a massive surge in activity on OpenSea, reaching an all-time high of over $2.5M worth of sales in just a day. While activity began to plummet just a few days after, several of the more popular collections still enjoyed a significant bump in floor prices, increasing by as much as 5x at the peak of the Reddit NFT run.
Source: Adapted from @polygon_analytics Dashboard
Be it the artist’s reputation or just the intricacies of their creations, it’s obvious that some collections became more sought after than others. The most traded collection currently belongs to one of the Spooky Season’s collaborators, known as ‘poieeeyee’. Featuring a mix of 3 thematically different versions of Snoo, the series has racked up over $1.5M in lifetime secondary sales by the time of writing. By comparison, that’s 50% ahead of The Senses (2nd most popular) and almost double the all-time volume of Foustlings.
Out of the 3 available avatars within the collection, the ‘Midas Touch’ featuring a golden Snoo, was undoubtedly the most popular amongst the wider crypto community. This could probably be attributed to the crypto crowd’s obsession with rare traits was probably a major contributing factor, with the highest sale coming in at 18 ETH (~$24,300). Earlier blue-chip collections such as BAYC and Azuki usually featured a golden version of their NFTs as extremely rare pieces, so it’s a no-brainer that crypto and NFT speculators were picking one up in hopes of flipping it for massive profits in the future.
Even though Halloween was sort of the relevant theme at the time, the original first season of collectibles performed just as well as their second-season counterparts. The top 5 most popular collections drops from Season 1, such as Foustlings, The Senses, and Imagination Station, also saw a big bump, with avatars being traded for over 5 figures, easily 100x its original maximum $99 price tag. In fact, the Senses currently holds the record for the highest sale as of the time of writing, thanks to a 30 ETH (~$40,500) purchase of The Hands #1, one of only 101 pieces in the series.
Source: OpenSea
Conclusion
While the attention surrounding Reddit’s Collectible Avatars may not have lasted as long as some might have hoped, with sales volumes tapering off and floor prices plummeting back down (and perhaps even lower than before), there is still something to be learned from the platform’s attempt at bridging the gap between Web2 and Web3.
For people who had no clue about crypto in the first place, these avatars essentially served as an invisible gateway for newcomers. By abstracting away the elements and terminology associated with NFTs, it’s easier for the avatars to appeal to a wider crowd without drawing the ire of communities that are not too favorable towards NFTs.
By making the name switch to ‘collectible avatars’, the concept of NFTs suddenly becomes a lot more relatable to most people. Similar to how the online community is used to purchasing in-game skins or exclusive content, it isn’t that farfetched to think that these avatars are exactly just that.
Make no mistake, despite their quiet launch and subsequent dump, Reddit’s NFTs are far from a flash in the pan or failed product. Onboarding the masses into the world of NFTs and crypto is no easy feat, but Reddit has proven that it can be done, even on a platform where there are some fervent detractors. It also shows that the right product, even without much utility other than cosmetic differences, can appeal to the community.
In fact, making it optional and using a low-key introduction proved to be the right approach. In the near future, we expect to see more traditional platforms and projects emulating and iterating on the blueprint that Reddit has set out to make NFTs more widely accepted.
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