Brian Nguyen refers to himself as a “whale,” which is a cryptocurrency term for collectors of high-value non-fungible tokens (NFTs). Nguyen, a Los Angeles-based venture capital advisor, stated, “I’m interested in buying the expensive, higher-tier ones.”
However, the 28-year-old has recently avoided well-known and popular NFT collections, such as those from Bored Ape Yacht Club and CryptoPunks. He has been purchasing Reddit Collectible Avatars, the latest NFT project from the community-based social platform.
Despite being only four months old, Vaults, Reddit’s NFT marketplace, has already reached a market size of $10.5 million. The platform now has more active users than OpenSea, which claims to be the largest NFT marketplace. Reddit’s Collectible Avatars, that are versions of the website’s iconic mascot, Snoo, are made by comic and digital art subcommunities. They are commonly available, can be purchased by a credit card, and cost between $10 and $100. However, the avatars quickly sold out, commanding high secondary market prices.
Nguyen says he has spent over $100,000 on Reddit Avatars so far, primarily via OpenSea purchases. He has already purchased five of the gold-colored avatars for $15,000 each. He is particularly interested in the Midas Touch line of Reddit Avatars.
NFTs grant users social influence in their own communities
Reddit members use their Avatars as their profile pictures, giving their images a glowing appearance when they post in forums. Nguyen explained, “People don’t know who you are when you make a post on Reddit, but an expensive NFT gives you more credentials.” In addition to being a long-term investment, he views avatars as a “social flex,” comparable to driving a Ferrari or Lamborghini. Nguyen thinks that an avatar profile photo is comparable to earning a blue verified tick on Twitter in terms of instant Nguyen thinks that an avatar profile photo is comparable to earning a blue verified tick on Twitter in terms of instant recognition.
According to Andrea Baronchelli, a lecturer at City University of London who conducts research in the crypto and NFT fields, as Twitter’s authentication method undergoes changes under new CEO Elon Musk, the social media network may introduce something similar to Reddit Avatars in the future. It is a brand-new tool that is highly adaptable. He states, “It’s a new tool, very flexible. It’s perfect for community engagement,”
Reddit decided to store its NFTs on the Polygon blockchain due to its cheap cost and environmental concerns, according to a news release. “The system is easy and efficient,” Baronchelli added. The fact that the charges are low is also highly alluring. According to Baronchelli, the usage of credit cards as a form of payment further simplifies the transaction because it ties the abstract concept of the blockchain to a practical use. “Simplicity is a must,” he stated.
According to Merav Ozair, a blockchain researcher and professor of fintech at Rutgers Business School, the platform’s community is essential to Reddit’s extraordinary NFT success. The majority of NFT and blockchain users engage on Reddit, Telegram, and Discord. “This is where you’ll find them” said Ozair. “Reddit’s creating something for the community itself.”
Despite the fact that Reddit is not as popular as Twitter or Instagram, Ozair believes the Avatar concept will eventually make its way to these platforms, given their curiosity. Twitter announced in January that NFTs can be used as profile photographs for Twitter Blue subscribers, while Instagram began testing “Digital Collectibles” in August, permitting a limited number of creators to publish NFTs on the platform. Ozair suggested, “After Reddit, they may have a business model on how to accomplish it.”
Despite the popularity of its NFTs, Reddit does not use cryptographic jargon
Multiple firms’ demand for avatars as a tool to incorporate NFTs has contributed to Reddit’s growth. It is a repeating subject. Ozair noted, “It’s a theme I see everywhere. Creating an avatar is what everyone is talking about right now: JPMorgan, Microsoft, big fashion designers.” JPMorgan was the first bank to enter the metaverse in February, when it opened a digital avatar-accessible lounge in the blockchain-based reality Decentraland. In October, Microsoft debuted ‘Mesh avatars’ for Microsoft teams, which replace meeting attendees with digital representations of themselves. Gucci partnered with the social networking application Zepeto in 2021 to create 3D avatars that can be dressed in Gucci apparel.
Ozair says that NFT avatars are especially advantageous in social media since they can be used as a form of authentication.“Because it’s one of a kind, if I own it, only I own it and nobody else can pretend it’s them. That has a great power.”
Reddit’s new program is defined by the absence of the phrase “NFT” and other cryptocurrency-related lingo. Arun Sundararajan, an NYU professor specializing in digital technologies, remarked, “They took a strategic approach to branding.” People’s perceptions of NFTs are now ambivalent. Recently, cryptocurrencies and non-fungible tokens have been associated with fraud and severe economic downturns.
Sundararajan stated that omitting such terms makes the process less scary for customers. Reddit is holding the user’s hand, making the experience appear more natural than anything in the blockchain world. The evolution of user-generated websites like WordPress and social media platforms, according to Sundararajan, occurred when it became apparent that the majority of the public desired an easier entry point. “Its success was partly driven by the fact that people didn’t want to deal with uncertain technological details.”
According to Sundararajan, despite the fact that NFTs have been surprisingly difficult for users to access, Reddit simplified the process by utilizing understandable terminology, integrating its new market into a familiar platform, and not bothering or intimidating consumers with the actual technology behind its avatars. “I think a lot of Web3 companies haven’t learned that yet.”