NFT Insights

Reddit NFTs: An Insight into the Journey from Web2-to-Web3

Reddit NFTs: An Insight into the Journey from Web2-to-Web3

One of the biggest issues that web3 has faced thus far is onboarding people from Web2 to Web3. The recent release of NFTs from Reddit has done an excellent job of this. Let’s take a look at the success of Reddit Collectible Avatar NFTs and how they managed to successfully integrate people from Web2 to Web3.

NFTGo reported that the total NFT trading volume on Ethereum was about $10.68 million in the last 24 hours. During the same period, Reddit Collectible Avatars saw its trading volume exceeding $2.5 million. Of all 2.83 million holders, over 2.5 million of them registered for Reddit Vault. For comparison, there are approximately 3.43 million wallets with independent trade records on Ethereum. Hence, the number of Reddit’s registered vaults is very close to Ethereum’s wallets that have been involved in transactions. To some extent, Reddit’s NFTs have skyrocketed public awareness of NFTs.

Rooted in Art

Reddit is a user-focused community forum with over 1.7 billion monthly visits. A week ago, Reddit partnered with around 30 artists to release 40,000 collectible avatars. This collection follows the first season of avatars that Reddit released in July of this year. The second-season avatars are more artistically sophisticated than the first generation. It’s worth noting that The Hands #1 NFT from The Senses x Reddit Collectible Avatars collection was sold for 30 ETH — a record high. As a result, the floor price of this collection has also increased. Currently, the floor price is 1.37 ETH.

One of the purposes behind the launch of Reddit Collectible Avatars is to invigorate the vitality and creativity of artists in the community. These artists will work individually and name their own collections. The three hottest collections are Poieeeyee, The Senses, and Foustlings, which have received royalties of around $23,000, $17,000, and $16,000. Each NFT of these collections is priced between $9.99 to $99.99, with Reddit taking only 5% of the sales and the artists receiving 50% of the royalties. Additionally, Reddit places a huge emphasis on artistic concepts and the artwork itself. The subreddit r/CollectibleAvatars is dedicated to discussing the artists’ inspirations, creation stories, tools, and more.

(Data Source:Reddit)
(Data Source:Reddit)

The Digital Identity in Social Media

According to one of Reddit’s reports, the discussion of NFTs among Reddit users has increased 423 times in the past six months. However, the stance of users is polarized as users encompass people who are already in the Web3 world as well as those who remain skeptical towards NFTs in general. The latter often questions the purpose of NFTs and its applications.

In the case of Reddit Collectible Avatars, holding an NFT represents a digital identity on the platform. On the one hand, it’s a reward from Reddit to its most active users as only those with a high Reddit karma are eligible to receive it. On the other hand, users possess ownership of assets, which can either be used on Reddit or transferred to other platforms.

(Data Source:Reddit)
(Data Source:Reddit)

The Web2-to-Web3 User Experience Curve

As we transition from Web2 to Web2.5 and eventually to Web3, we need to be aware of both the obstacles and drivers that will either hinder the mass adoption of NFTs or facilitate its adoption.

(Data Source:NFTGo)

First, understanding the concept. When it comes to NFTs, many people only know that it is the abbreviation of Non-fungible Token, and that BAYC and CryptoPunks are some of the most famous projects. Other than that, they are still unclear about the applications of NFTs and how these smart contracts can revolutionize how we use the internet.

As brands like Nike, Adidas, and Starbucks attach the technology to their businesses more and more people are getting comfortable with the idea of using them. These companies are bringing more tangible utilities to their NFTs than many other tech companies are capable of. Furthermore, by adopting a more friendly term, such as collective avatars, Reddit enables the public to understand the concept more easily.

Next, the tools involved. After forming a foundation, “purchase” is the next step to take. If Ether and other cryptocurrencies are compulsory to get the process started, it may result in a lack of momentum among potential buyers. To some extent, we can hide the technical difficulties behind transaction interfaces and thus prevent users from feeling burdensome throughout the process. In other words, if web2 users don’t need to create a crypto wallet they are much more likely to purchase an NFT. Once we broadly define it as collective avatars, multiple payment methods can be employed. On Reddit, users are able to use local currencies like the US Dollar on Stripe to buy NFTs, which makes purchases much easier.

Now that users have their NFTs, all they need to think about is how to trade them. While Reddit doesn’t have a secondary marketplace, there are posts on Reddit about the transfer of NFTs from Reddit to OpenSea and trade thereon. Of course, we would definitely be interested to see if Reddit will launch a new marketplace for trading. In that case, Reddit will have combined the community features of Discord and the trading features of OpenSea.

The right combination of community, tools, and data can be crucial when it comes to analyzing NFTs. Some trading newbies may be devastated if they find themselves missing chances in the market as a result of not having access to these. When such circumstances arise, it’s a good idea to get involved in the community and pick up some NFT tools and data analysis skills.

(Data Source:Reddit)
(Data Source:Reddit)

In general, through professional NFT data platforms, users can get hold of market sentiment and decide the best timing to buy or sell. Indicators such as the whales holders of each collection, blue chip rate, etc. are useful as well. After establishing a deeper understanding of the market, Web2 players will advance from being a Web2.5 trader to a Web3 degen.

Closing Thoughts

Compared to Reddit’s enormous user base, NFT holders and people who understand it still only account for a minority. From this successful attempt to combine social media and NFTs, we have come to some key points. First, the importance of community. People who use Reddit regularly identify themselves strongly with the subreddit communities of which they frequent. Furthermore, Reddit gives creators and users the opportunity to communicate directly. Secondly, profit is part of the learning process. The financial attributes of NFTs cannot be ignored, thus it allows for a simultaneous increase in both profits and knowledge. Lastly, an understanding cycles and an awareness of ricks. In the last bull market, we witnessed the highest floor price of top collections. However, in this bear market, the value of many of these collections fell to zero. If we continue to build and establish communities and lower the threshold for newcomers, we will see not only a new narrative about NFTs in the next bull market, but also a trillion-dollar user market.

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