Reddit Digital Collectibles (NFTs) are already making waves in the world of web3. They offer a new way to think about digital ownership and could eventually revolutionize how we interact with digital content. For now, they're providing a new way for people to show their support for their favorite online communities.
Blockchain technologies have been long siloed from any other industries. This is partially due to its complicated and unique onboarding process. NFTs were known to the broader world as a cash grab and scammy product. Reddit recently launched its NFTs labeled as digital collectibles. This is a historical moment where a traditional company has correctly executed a campaign utilizing web3 technology (NFTs and Blockchain Ledgers) to empower users and provide value to an existing and thriving ecosystem. This is important as more and more use cases will begin to arise in the future, and businesses, organizations, and individuals will look at Reddit as a prime example of what they would like to achieve.
Reddit Digital Collectibles
Reddit explains the collectible avatars as "limited-edition avatars made by independent artists, in partnership with Reddit, and provides owners with unique benefits on the Reddit platform."
Additionally, each collectible comes with avatar gear which users can mix and match with other gear they may hold. Users can buy these collectibles with fiat (government issues) currency at a set price. These collectibles were stored in a "vault" on the polygon blockchain. I tried buying an avatar on their site but had some trouble, a problem their other users didn't have trouble with.
NFTs Like Never Before
Several aspects make Reddit Digital Collectible NFT enjoyable to learn from. These include; Native Integration, Account Abstraction, and NFT Strategy and Distributions. It is these principles that businesses, organizations, and individuals will take and learn from when they launch their blockchain-powered projects.
With over 50 million daily active users on its site, Reddit had the opportunity to sell its digital collectibles to its existing users through native integrations. Unlike other interactions such as Twitter and Instagram, although different, natively integrating all aspects of their NFT collection within Reddit has proven to be a big win for them. This NFT collection would not have been as successful as it was if Reddit users had to go to the open sea to purchase their collectibles.
Reddit chose to integrate NFTs into its ecosystem in a centralized manner. This, however, does not mean that users do not have the option to "exit." Users of Reddit can choose to exit from Reddit centralization to a fully on-chain blockchain, polygon. This is evident as users have the ability to sell their digital collectibles on a secondary marketplace that supports the polygon blockchain.
Account Abstraction - Vaults and Tokens
Going down the path of native integrations, Reddit had to create a system allowing this integration. Many of you know that you must have a crypto wallet to buy an NFT. Reddit needed a solution to store users NFTs, which led to the creation of vaults.
Vaults are centralized crypto wallets that assign ownership to users who own that NFT. Technically speaking, this is a custodial wallet that Reddit holds and assigns ownership to users. This ownership is still backed by the polygon blockchain. As mentioned above, users have the ability to exit into their own wallets. #notyourkeysnotyourtokens
These vaults are interesting as they allow users to interact with blockchain-enabled technology, fungible (ERC-20), and non-fungible (ERC - 721) tokens. Reddit has introduced non-fungible tokens into its ecosystem but will soon introduce fungible tokens into its ecosystem as well. This means that there is a possibility of a $Reddit token, as well as community-specific tokens that would technically have the ability to be sold on the secondary markets.
NFT Strategy and Distributions
Reddit is removing the traditional limited supply of NFT collections but instead focuses on the rarity of specific NFTs. This unlimited theoretical supply of NFTs is needed when dealing with Reddit's multidimensional user base. I foresee a future where Reddit experiments with NFT drops outside of avatars, which is enabled without the restriction of limited NFTs supply.
I believe that Reddit NFTs will be a historical case study on how web3 can power businesses and users on a massive scale without being web3.
Reddit Collectibles Today
Reddit NFTs have proven to be an initial success. So far, the total sales volume of Reddit NFT is close to $11 million. Furthermore, more than 96% of all Reddit NFTs are owned by unique individuals. This means that there are not many whales within their NFT ecosystem.
On top of this, a total of 2.8 million vaults "wallets" hold Collectible Avatar NFTs. For perspective, Opensea currently has around 2.4 million wallets holding NFTs. In a span of 4 months, the Reddit NFT launch has introduced more accounts into the blockchain ecosystem than Opensea has in its entire existence. That's major.
The Future For Reddit x Web3
Through Reddit content they have released, they have painted a picture of a Reddit powered by blockchain technology. It is evident that they believe blockchain can be used to enable and empower their users and their communities on top of their platform. It would be massive if Reddit could realize its goal of creating an ecosystem where communities are empowered and giving the tools necessary to make an impact within and outside of its groups. You can think about this as a sort of DAO model where a DAO is a community, NFT and Tokens are simply tools to carry that impact out.
Reddit has stated, "Communities are the lifeblood of the Internet. But on today's Internet, they are not in charge of their own destiny. Instead, they are controlled by the large platforms that hold all the power online. It is time for a change. Community Points are the first step toward a different future for online communities. These tokens live on the blockchain, which means they are truly owned by the community. Over time, your community will benefit from even greater control and independence — on and off of Reddit."
I am excited to see what comes next from Reddit experiments in web3. Their NFT launch has been successful, but it is not over. Will their success continue after their initial hype cycle? Can they build a product that genuinely empowers their communities? Can they create value as a centralized entity rather than a decentralized one? Many questions remain, but I have no doubt that they will continue to build.
Reddit Digital Collection NFTs shine light on the future of web3 adoptions. It might not be as decentralized as we all have hoped, at least not yet. Still, it proves to be a valuable technological tool that any business, organization, or individual can use to empower their support and grow their business.
2: Reddit NFT Dune Analytics: https://dune.com/polygon_analytics/reddit-collectible-avatars
3: Reddit Vault Explanation: https://www.reddit.com/vault/
4: Reddit Statistics: https://www.oberlo.com/blog/reddit-statistics
5: Open sea Secondary Marketplace: https://opensea.io/category/reddit-collectible-avatars
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