What are Reddit Collectible Avatars?

Contrary to popular belief, non-fungible tokens (NFTs) have existed since 2012, with many believing that the first forms of NFTs are so-called Colored Coins — small denominations of Bitcoin, or Satoshis, used to represent immutable digital or real-world assets on the Bitcoin blockchain.

2017 herald popular NFT collections like the Rare Pepe memes, CryptoPunks and CryptoKitties on the Ethereum blockchain, which offers more capabilities over the Bitcoin’s scripting language.

However, one could argue that 2021 was when NFTs truly entered the mainstream — sales volume reached $24.9 billion in 2021, an absurb 261x gain compared to just $94.9 million in 2020. With it, we saw NFT marketplaces like OpenSea and its slew of competitors, the record $69.3 million auction of digital art by crypto artist Beeple, "blue-chip" NFT collections like one inspired by primates and endless imitations that could put the counterfeit luxury market to shame.

As the eventful (and we don't mean it in a good way) 2022 played out, the crypto market entered into a bear market — Bitcoin and Ethereum fell over 70%, while many other altcoins lost 90% of its value — and this has weakened the demand for NFTs.

Source: CryptoSlam

A look at the sales volume (USD) of NFTs and one can see that it has been on a steady decline, falling over 80% since the start of the year. Unique buyers have also taken a hit — the only comfort being that the numbers have somewhat stabilized around the 30,000 - 50,000 range.

However, despite this lacklusterness, Reddit's NFT project — known as ‘Reddit Collectible Avatar’ — has found success amidst a bear market. So that begets the question: What is Reddit's NFT project, how does it work, and why has it attracted so much buzz?

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What Are Reddit Collectible Avatars?

Source: Reddit

Few networking platforms are as big as Reddit. Launched in 2005, the social network has established itself as a metaverse of a sort — before the term got hyped as it is today — as it consists of several sub-forums, also called subreddits, dedicated to thousands of niche communities.

To put the colossal nature of Reddit into perspective, it boasts 430 million active monthly users and 52 million daily users. Therefore, it was a big deal when Reddit announced plans to venture into the NFT space in June 2021. The social network launched the CryptoSnoos NFTs, a collectible inspired by Snoos, Reddit's official mascot and available on OpenSea.

CryptoSnoos (Source: Reddit)

Looking back now, it would seem that the 2021 launch was an attempt to test the water before going all out on NFTs. It is also safe to say that it gave Reddit enough data to determine how best to approach the volatile NFT space. A year after the launch of Cryptosnoos, Reddit has officially unveiled its more robust NFT project that will, in time, cements its place at the top of the NFT conversation.

Named Reddit Limited Collectible Avatars, the project looked to introduce digital collectibles that integrate with the Reddit platform. Essentially, users can purchase these Collectible Avatars, customize them, use them as profile pictures on Reddit and more — all while storing these Polygon-based NFTs on Vaults: a native, Ethereum-compatible wallet on Reddit.

In its second attempt launching an NFT project, the social network does away with the terminologies, instead marketing them as “collectibles” while letting the NFT and blockchain tech run in the background. Furthermore, these NFTs are now native to the Reddit platform, whereas previously the CryptoSnoos NFTs are only listed on OpenSea. Finally, these collectible Avatars are designed by independent creators from the Reddit community, particularly the r/Comics and r/AdobeIllustrator, with all of the 30 plus collections currently sold out. Importantly however, all Reddit users are still able to create customizable Avatars without them being NFTs — therefore there is no gated access, unlike many NFT projects currently.

How Do Reddit Collectible Avatars Work?

While Reddit has avoided the NFT label, the fact remains that its digital collectibles are indeed NFTs. In other words, they possess the attributes of an NFT in that they exist on the blockchain, are scarce and transferable. In addition, each Collectible Avatar comes with different traits and rarity levels. The combination of these two characteristics (rarity and traits) determines the value that each Collectible Avatar commands on marketplaces.

Source: Reddit

While this is a given, Reddit has implemented additional features that seem to have elevated the appeal of its NFTs. The first is that they are purchasable at a fixed price during launch. In other words, the NFTs are not auctioned off. Also, you do not need a ton of experience with cryptocurrency or blockchain technology to access, purchase or use these NFTs. You do not even have to leave the Reddit platform or own cryptocurrency to buy — Avatars can be purchased in local fiat currencies — or enjoy the benefits of owning an Avatar.

So where can you buy these NFTs?

How to Buy Reddit Collectible Avatars

First, you need to locate the Collectible Avatar Shop on Reddit by clicking on your profile dropdown menu on the top right.

A pop-up window will appear, click "Shop" to explore and buy these NFTs with credit or debit cards and other conventional payment methods.

Unfortunately, all the avatars available on the Collectible Avatar Shop have sold out at the time of writing. However, you may have to buy Reddit's Limited Collectible Avatar on a secondary market. Specifically, you can purchase these NFTs on OpenSea, the marketplace that allows users to trade NFTs with cryptocurrencies.

To buy a Reddit Collectible Avatar (or any NFTs for that matter) on OpenSea, you need to create or own a crypto wallet like MetaMask, Coinbase Wallet, WalletConnect and more.

For this article, MetaMask was used, more specifically the MetaMask and Reddit mobile app was used to purchase and transfer the Collectible Avatar.

First, within the MetaMask mobile app browser, head to the Reddit Collectible Avatar collection page on OpenSea to purchase an Avatar.

Once purchased, click into the NFT you own on OpenSea, and you will see a link in the "Description" tab to connect it to your Reddit account.

You will be redirected to the Reddit app, where you will need to create a Reddit Vault, the social platform's native wallet. Note that this process is a requirement for those looking to purchase Reddit NFTs on OpenSea and use them on the Reddit platform.

Voila! Once you have your NFT transferred to your Vault on Reddit, you can use it as your profile picture. Interestingly, your avatar displays glowing effects whenever you post comments. According to Reddit, avatar owners get to enjoy other community perks. The social network says that users who own Collectible Avatars enjoy "special profile treatment and special comment treatment on posts."

Furthermore, the revenue generated from the sale of these avatars on the primary market goes to the independent artist who created them. Moreover, the artists earn royalties whenever their creations are resold on the secondary market.

It is also worth mentioning that Reddit allows users to customize their avatars by mixing and matching different gears available on the avatar builder page.

Another vital fact about Reddit's Collectible Avatar is that it exists on the blockchain infrastructure provided by Polygon, an Ethereum second-layer solution.

So that begs the question: Why has Reddit opted for Polygon?

Why Did Reddit Opt For Polygon?

There are two main factors Reddit considered before choosing Polygon.

Transaction Cost and Scalability

There are several factors why NFTs are finding it hard to penetrate the mainstream market. One of which centers around the scalability concerns associated with the Ethereum network, which houses the largest NFT market. While Ethereum offers the level of security and decentralization required by NFT enthusiasts, it is currently lacking in terms of speed.

At the time of writing, Ethereum base layer blockchain's maximum capacity is 15 transactions per second. As such, it comes as no surprise that Ethereum has historically been plagued with network congestion, which often causes transaction fees to skyrocket.

While recent upgrades like the Merge and EIP-1559 have shown progress in the right direction, the lack of scalability has two core impacts on the efficacy of Ethereum. The first is that the transactions are significantly slower compared to conventional payment systems like Paypal. The other is that it is more expensive to use Ethereum, especially when there is network congestion.

In light of this, layer-two solutions like Polygon have introduced and implemented ways to optimize the speed of Ethereum. More often than not, these solutions try to unburden Ethereum's base layer by performing some of the computation required to validate transactions off-chain or on a second layer. Polygon, in particular, utilizes multiple second-layer technologies, including ZK rollups and optimistic rollups, to boost the performance of the Ethereum network, although the current Polygon mainnet is a sidechain powered by its native token, MATIC.

More importantly, Polygon can process up to 65,000 transactions per second, which is a massive improvement on the 15 TPS offered by Ethereum's base layer.

Therefore, it made sense for Reddit to opt for a blockchain infrastructure that can handle high transaction volumes without experiencing a significant spike in fees.

Environmental Friendliness

Another important factor stems from the need to ensure that blockchain adoption does not unnecessarily increase our carbon footprint.

One of the recurring controversies surrounding cryptocurrencies revolves around the energy consumption of blockchains, particularly those utilizing the proof-of-work (PoW) consensus mechanism. Critics believe that using these blockchains contributes immensely to the environmental crisis. As a result, enterprises looking to integrate blockchain solutions are working on offsetting their carbon footprints.

Polygon plans to become carbon-negative in 2022 and has pledged $20 million to sponsor green initiatives, offset its carbon footprint and buy extra carbon credits. According to Reddit, Polygon's commitment to establishing a green blockchain is one of the reasons it chose to build on the blockchain.

Top Reddit NFT collections

Recall that Reddit Collectible Avatars are designed by independent artists. These artists create limited editions, unique collections of Collectible Avatars that possess different themes and artistic styles.

According to Pali Bhat, chief product officer at Reddit, over 3 million users have created a Vault. Of the total, 2.5 million users have opened these wallets to purchase NFTs. It is also worth mentioning that the Reddit Collectible Avatars have amassed over $11.8 million in trading volume. Below are the three collections from this project that boast the lion's share of the $10 million total volume.

Spooky Season: poieeeyee x Reddit Collectible Avatars

This is a Halloween-themed collection of avatars created by Redditor poieeeyee. At the time of writing, this series leads the way in terms of trading volume, having sold 1,123 ETH (around $1.53 million) worth of NFTs.

The Senses x Reddit Collectible Avatars

The second top avatar series was designed by Redditor Rojom. This series features creepy-looking avatars with what looks like a misty forest backdrop. At the time of writing, this series has an 854 ETH ($1.16 million) trade volume.

Foustlings x Reddit Collectible Avatars

An independent artist named Tyler Foust designed the third-best-performing collection under the Reddit Collectible Avatar project. This series predominantly incorporates the squiggly line style to design Snoos. The total volume of Foustings sold is 692 ETH (around $900 thousand) at the time of writing.

Are Reddit Collectible Avatars Worth Keeping An Eye On?

Although it is somewhat tricky to determine the long-term viability of NFTs, there are unique factors that suggest that Reddit NFTs are worth keeping an eye on.

One may argue that the vastness of the Reddit platform will, in the long run, rub off on the value of Reddit's NFTs. For what it is worth, a platform with over 430 million active monthly users can generate the hype required to induce mainstream adoption. Even if just a quarter of the monthly users were to buy and use these avatars, the Reddit collectibles avatar would firmly cement its place as one of the most successful NFT projects ever.

However, for this to happen, the avatars must be worth owning. In other words, the perks associated with owning these avatars in and outside the Reddit ecosystem has to appeal to mainstream users. At this junction, you may be wondering: are there use cases, potential benefits, or special scenarios that could induce the exponential growth of the value of Reddit NFTs?

Below are some of the factors that make Reddit's Collectible Avatars NFTs:

An Endless Array of Rarity

One of the perks of owning a Reddit NFT is that it provides users with the freedom to customize their avatars as they deem fit. You may decide to merge traits between two or more NFTs that you own. The ability to mix, match, and trade gears or traits opens up more possibilities and establishes new frontiers for rarity trading.

A Massive Target Market

As stated earlier, Reddit, in terms of sheer size, is a colossal platform. In other words, the Reddit NFT project already has what competitors are seeking to acquire — a large audience. It is even more impressive if we consider that Reddit does not have to worry too much about losing its market share to other NFTs. All Reddit needs to do is to keep people interested in using its social network and the utility of its avatars.

Conventional Marketing Strategy

Notably, Reddit kept away from technical blockchain terminologies in its marketing campaign, as seen in the article announcing the launch of the Collectible Avatars.

Instead, Reddit has opted to name its offerings digital collectible avatars, thereby making potential buyers feel comfortable with the idea of owning one. In addition to this, the possibility of purchasing these NFTs with local currencies makes them more accessible to the everyday user.

Possibility of Becoming Vintage NFTs

As more Reddit avatars are released over the years, the genesis collection may become increasingly rare and expensive as long as the Reddit platform continues to exist. This is similar to how old gun skins are some of the most coveted in-game assets of CS:GO.

Enterprise Collaborations

Depending on how successful Reddit Collectible Avatars become, there is an opportunity here that other enterprises can take advantage of. Instead of building their NFT solutions from scratch, they can partner with Reddit and capitalize on its existing market to test the viability of their products. For instance, a fashion brand can decide to launch NFT-based gear on Reddit to test its appeal to a mainstream audience.

Additional Blockchain Implementations

Things might get even more interesting if Reddit integrates additional blockchain implementations like on-chain governance and a fully-integrated marketplace. By doing so, users will have more reasons to own these avatars.

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