Is Reddit Writing the Playbook for Bringing Web3 to the Masses?
Strap in for mainstream onboarding 101
What’s going on with Reddit NFTs?
They say a picture tells a thousand words but…
I’d say a chart tells even more and this chart below is the most significant chart in web3 right now.
NFTs have been around since 2017 and have accumulated 3.4 million unique users (wallets) over that time (across all relevant marketplaces on Ethereum, Polygon, BNB, Arbiturm, Optimism, and Avalanche).
Reddit almost doubled the total NFT market with its collectible avatars since launching in May of 2022. That’s 9 months total for Reddit versus 6+ years for the entire NFT market! 🤯
Are we witnessing the inflection point for NFTs right in front of our eyes?
Is Reddit in the process of taking NFTs mainstream or what is really going on here?
In this report, we are going to 👀🔛⛓️ to see what’s really happening with Reddit NFTs and combine that with insights into what Reddit is doing to see such incredible growth.
Buckle up friends, this PRO report is a banger.
The trojan horse of web3 has arrived and its name is Reddit.
Reddit Collectible Avatars TL;DR
PRO members, let’s start this one off with some Reddit context.
Reddit is a social news website and forum where content is socially curated and promoted by users through voting. The last numbers publicly published by Reddit suggest that there are 430 million monthly active users on Reddit.
In May of 2022, Reddit launched “Collectible Avatars”, which are limited-edition avatars that provide owners with unique benefits on the Reddit platform (used as a profile picture, for community access, etc.).
The Creator Collections were made by independent creators in partnership with Reddit and are powered by NFTs on the Polygon blockchain.
Reddit also launched its own collection of free avatars for users which have surpassed a specific activity threshold (~2,500 Reddit Points). All Avatars, regardless of the collection, are minted within Reddit’s platform using the Reddit non-custodial digital wallet called a “Vault”.
Currently, the Reddit Vault doesn’t have the functionality to integrate across other web3 dApps.
However, the Reddit NFTs are on the Polygon blockchain and can still be sent to another web3 wallet and sold across any NFT marketplace, such as OpenSea or Magic Eden.
Reddit’s On-Chain Footprint By The Numbers
To date, Reddit users have minted a total of 8.5 million collectible avatars, making it one of the largest web3 activations ever.
In total, 6,522,000 unique Reddit users have minted at least 1 Reddit Avatar. 🤯
But the interesting thing about the number of unique minters for Reddit Avatars (which differs from all other unique NFT user stats in web3) is that these are mostly all real, unique people, not just a unique wallet.
What I mean by this is that in order to create a vault on Reddit and mint an Avatar NFT you must have a legitimate account on Reddit that has also achieved a high enough activity level.
Whereas to interact with any NFT collection directly on Ethereum or other blockchains one person can create as many unique wallets as they want with no friction. 🤷
So in this instance, ‘unique wallets’ actually refers to unique people (not exclusively, but almost). If we go back to the first chart above, it means that in terms of unique humans interacting with Reddit NFTs, it’s likely far greater than double the entire NFT market.
In the chart below we can see the amount of free vs. paid mints on Reddit.
Other than a small test month of free mints in May, Reddit, in partnership with its creators, launched exclusive avatar collections for a mint price between $9.99 and $99.99.
During that time, Reddit users paid to mint and collect almost 4 million NFTs, showing that there’s some serious interest in owning these avatars.
In December 2022, Reddit reignited the minting craze with its free avatar collection, driving more than 3 million users to mint its avatars in less than 2 months! 🚀
The numbers here are massive for web3, yet interestingly there isn’t a big buzz across Twitter, the web3 industry, or mainstream media.
I tweeted a chart about these numbers a few weeks ago and it went viral, almost like it was breaking news to most of the industry.
However, 2 interesting findings came from this tweet:
Some people are brushing these numbers off as irrelevant since most wallets have never executed a second transaction on the blockchain (aka they aren’t active web3 users).
The Reddit web3 people who are on Twitter are pumped about their avatars (love to see it).
Let’s talk about the Reddit holders and the secondary markets.
First of all, because the NFTs are minted in the Reddit Vault, users don’t have the ability to execute other web3 transactions (other than send their existing NFT to another wallet), so of course most users have only one transaction (more on why this is a good thing in my key takeaways at the end).
Secondly, most of the users don’t actually know or understand that their avatar is an “NFT”.
They know that they own the asset and have the ability to trade or sell it if they choose, but that’s about it. Otherwise, the minting of these avatars looks and feels like a typical web2 experience.
As an experienced web3 user looking to mint my own NFT, I was almost confused trying to do it because I was overthinking it trying to figure out what the gas price was and looking to confirm what blockchain it was on. Ironically, the process was much simpler. 😂
None of that information was there nor was it needed, since Reddit pays for all gas fees on Polygon anyway. Though, there was a link to the block explorer to verify the transaction.
In my opinion, this is the exact UX we want for web3 technology. Users understand the value and features of what they have, with the technology powering it hidden underneath.
This is the famous “DeFi mullet” thesis playing out for web3.
More on this in a minute though, let’s finish up the on-chain analysis of Reddit Avatars before we discuss the impact this may or may not have on the industry.
So buckle up, because we’re about to dive into some charts and data that’ll show us just how well Reddit has managed to execute this NFT strategy. They’re writing the playbook and all other major mass-market technologies are taking notes.