Reddit's NFT Success Paving The Way for Big Tech
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Reddit's NFT Rise & Its Implications On the Rest of Big Tech
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This week, we'll be talking about Reddit, particularly, Reddit's new digital collectibles and what it means for the public adoption of NFTs. We briefly mentioned it last week, but the story is too rich to only be touched on briefly. Let's dive in ⬇️
Reddit's Collectible Avatars
In July, Reddit announced that they would be bringing collectible avatars to the platform.
Here's what they had to say about the avatars and how to purchase them ⬇️
- They are available for purchase (vs. being free or available via Reddit Premium), and independent artists that create the Avatar will be paid a percentage for each Collectible Avatar sold.
- The Avatars are backed by blockchain technology, giving purchasers rights (a license) to use the art – on and off Reddit.
- You do not need cryptocurrency to purchase these avatars, nor are they being put up for auction. Each avatar has been priced at a fixed amount and is purchasable with fiat currencies. You'll only need crypto on the after-markets, like OpenSea. [Via Reddit]
The weird thing about all of this? Reddit isn’t calling them NFTs. In fact, they haven’t used that word a single time. The words “digital collectible” and “blockchain-based tech” have been used frequently, but there hasn’t been any indication that they want it referred to as an NFT collection. We think they are doing this to avoid the negativity and confusion surrounding the NFT market. "Digital collectibles" sound cute, fun, and harmless. And as you'll see in the next section, it seems to be working.
How Much Money is Reddit Making From This?
In order to purchase a collectible avatar, users had to open a Vault wallet on Reddit. The wallet is where users can keep their collectibles such as avatars, community points that they earn from actively engaging on the site, and more. If you think that the process of opening a wallet might slow users down, you'd be wrong.
Wallet signups have gone absolutely nuclear.
There have been over 3 million wallet openings since the press release and the collectibles have generated over $9 million in revenue! What does that mean?
- Reddit now has more NFT wallets than OpenSea, the public NFT marketplace worth over $13 billion.
- The collection is on its way to being one of the best-selling NFT collections ever.
One of the many reasons that this collection has been so successful is that the avatars are putting money in users' pockets. Many active users have access to the collectibles for free, and if they don't want the avatar, they can sell it on a marketplace like OpenSea.
Reddit is said to be taking a 5% percent royalty on every transaction involving the avatars. Royalties are one of the major reasons why so many large, user-centric companies like Reddit are choosing to create NFTs. But even with all this success, Reddit has barely touched the surface with its avatars. The site has over 50 million daily active users, and every day, thousands more users are signing up for a Vault wallet.
What People are Saying
One Twitter user talked about how Reddit's wallet structure made the NFT easy to collect.
“I think whales (people buying large amounts of crypto or NFTs) are liking Reddit [NFTs] just because of how easy and successful they have brought in a massive group of newcomers to NFTs. So it's a show of support and confidence in their execution.”
This Twitter user explained how they think that Reddit just solved the NFT onboarding. problem.
"Reddit User: 1. Hates NFTs 2. Thinks Reddit Avatars are cute 3. Buys one for $10 4. Hears it's worth $1500 now 5. Onboards to Polygon 6. Sells Reddit Avatar 7. Now has >1 ETH on-chain from an NFT"
Another Twitter user posted this meme, which summarizes exactly how many people feel about the Reddit NFTs 😂
Our Prediction for the Rest of Big Tech
If there is any phrase we've written the most at The Mint, it's probably "we're just getting started."
We dedicated a full issue to the Reddit NFT news because we believe it's an indicator of what's to come. Web3 is coming for big tech.
- Several rumors say Twitter is working on a crypto wallet. The blue bird is now officially owned by Elon Musk, who is a known cheerleader of crypto, so this one feels inevitable. I predict you'll be able to transact directly within Twitter using crypto. With one thumb tap, you can support your favorite creators, purchase a product from an app, or pay a friend just like Venmo.
- Mark Zuckerberg is betting the farm on the metaverse. He started by rebranding his company Facebook to Meta (sidebar, a bank in Sioux Falls, the Mint's hometown, got $60m from Facebook to give up the name MetaBank), and now he's spent over $10 billion on the metaverse and told Wall Street he plans to spend even more next year. This is an all-in move on the metaverse. It hasn't gone well for Zuck so far and the stock price doesn't like the move, but if Zuck can pull this off the way we live and work is going to look really different.
- Instagram has NFT profiles, Discord is the home for crypto communities, and several startups are trying to become the default Web3, decentralized social network. At this point, it is not clear who the winners will be at the intersection of crypto and social, but it's clear there will be at least a couple. The race will be an interesting one to watch.
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