Earlier in July, Reddit unveiled its NFT marketplace for Collectible Avatars – limited edition profile pictures that are customizable and inspired by the platform's mascot. Holding one of these collectible avatars will provide owners unique benefits on the social media platform, from standing out in the comments to being able to mix and match outfits in its Avatar Builder.
Each design is created by independent artists from Reddit's popular creative communities, in partnership with the company. Artists receive payment for each Collectible Avatar that is purchased on Reddit, minus any fees, along with royalties from any ensuing secondary sales of their Collectible Avatars on open marketplaces.
The limited edition avatars are hosted on the Polygon blockchain. But instead of requiring users to learn about layer 2s and subjecting them to a clunky onboarding process, Reddit minimized friction by opting to use Vaults – digital wallets for each user built into the Reddit platform itself. These Vaults will host Reddit's collectible avatars as well as any subsequent NFTs that may be released. They are third-party compatible, meaning that users familiar with crypto can also transfer them to their crypto wallet of choice.
The launch of these Collectible Avatars received widespread praise from news outlets, with many NFT enthusiasts joking about how Reddit's clever rebranding to 'Digital Collectibles' was all it took to convince a community of known skeptics into becoming advocates.
Reddit's Chief Product Officer, Pali Bhat, even stated in a TechCrunch panel that the new Collectible Avatars project has led to the creation of 3 million new wallets under its Reddit Vault system – onboarding a significant portion of Reddit's reported 50 million daily active users.
And the numbers back it up too. According to Dune Analytics, there's been over $7.6 million in cumulative sales volume, with over $1 million traded in the past 24 hours at the time of writing. Something that every news outlet seems to highlight in their headlines.
With this parabolic rise in perceived adoption, it may be tempting to buy a Reddit Avatar. If you're certain of doing so, you can peruse and purchase from the variety of Collectible Avatars on OpenSea. But before you do, I would implore you to examine the validity of the touted 3 million avatar holders. Because by comparison, the total number of traders on OpenSea is approximately 2.3 million.
Blockchain data certainly doesn't lie, but it doesn't tell the entirety of the story either.
There are certainly a lot of transactions happening around the collection, but the overall social sentiment from non-NFT participants certainly doesn't seem to match the implication that there has been a massive onboarding of new fans.
blah-chain based avatars? Twitter needs to bring back the downvote button.— 🏳️🌈Fluffy Wuffy🏳️⚧️ (@primarylupine) October 19, 2022
If we are on the cusp of mass adoption with the number of Reddit Vault wallets surpassing OpenSea traders, then surely the same must be true for its communities as well, right?
A common misconception is that the aforementioned 3 million Vault wallets refer to active users trading their collectible avatars on the secondary market. In actuality, most are regular Redditors who had to open a Vault because it was a prerequisite to playing with the Avatar Builder that was released in October 2020. I myself was surprised to find that I had a Vault, despite not being an active Reddit user. It remains entirely possible that a significant portion of these accounts will have no interest in trading their avatars, or are just dormant altogether.
Even if the Reddit avatars may not be the catalyst for the mass adoption of digital collectibles, it does set up an important precedent for other Web2 companies. Reddit has proven that it knows how to serve its community, by empowering artists to showcase their work and offering a generous revenue-split model. Eventually, the skeptics will come around, and in the meantime, those interested can keep track of how outrageous the top avatar sales may become on RedditFloor.com.