Everything you need to know about Reddit NFTs

This article originally appeared on Lucky Trader: Everything you need to know about Reddit NFTs

Unless you’ve been living under a rock for the past 48 hours, you’ve heard the growing chatter surrounding Reddit Collectible Avatars (affectionately referred to as Digital Collectibles vs. NFTs).

But as their popularity has grown, so have the number of questions about where to find them, how much they cost and more.

That’s where this guide comes in as a one-stop-shop for all the basic information about Reddit Collectible Avatars. This overview will answer the following questions:

• What are Reddit Collectible Avatars?
• How did users get them?
• Where are they sold?
• Why are Reddit avatars valuable?
• What does it mean for the traditional NFT environment?

Let’s dive in.

What are Reddit Collectible Avatars?

Reddit Collectible Avatars are limited edition profile picture (PFP) digital art used for digital identity and additional utility benefits on the Reddit platform. For example, Holding a Reddit Collectible Avatar unlocks features on Reddit, as giving “special profile treatment.”

Each avatar is customizable, with owners able to swap out equipment and accessories.

Although Reddit relies on the term “digital collectible”, each Reddit Collectible Avatar is powered by a non-fungible token (NFT) located on the Polygon blockchain.

To lower the barrier to entry, Reddit first gave users the ability to create their own crypto wallets, called Vaultswithin the Reddit platform.

The artwork for each Reddit Collectible Avatar was provided by a variety of independent artists and created in collaboration with Reddit. These creators are paid for each avatar sold on the Reddit platform, along with ongoing royalties on secondary market transactions.

At the time of writing, there are more than 2.93 million Reddit Collectible Avatars that have been claimed or sold across 61 different collections. There are currently 2.84 million holders for these avatars, but only 3,650 of these wallets have acted.

How do you get a Reddit Collectible Avatar?

Reddit users could purchase their Collectible Avatars in the Collectible Avatars Shop as early as July 2022. The shop page on the Reddit platform includes a list of all available collections, more information about the artist and creators, and a guide to setting up a Reddit Vault wallet.

The store page can be found by navigating to the “Style Avatar” section of the applications in the drop-down menu at the top right of the Reddit website, then clicking “Buy”.

To find additional details about a specific avatar, navigate to “View Details” in the “Outfit Details” section of the avatar builder or through the “Details” menu found on the Reddit profile page.

Starting in August, Reddit began “airdropping” (sending the avatars for free) to the most active community members on the Reddit platform. This led to an increase in adoption, popularity and widespread ownership across Reddit users.

As more avatars were used on the platform, more people turned to the paid collections and started buying. Sales volume picked up in September, then even more in early October as the paid collections began to sell out.

But Reddit users who have yet to claim an avatar may still be in luck. Users can check their accounts to see if they’ve earned a free NFT by logging in and looking for a banner telling users “You’ve earned a collectible avatar” and “Claim yours now.”

Owners of the avatars “own” a suite of rights, including the right to display the avatar on and off Reddit, along with “special avatar effects” that accrue to those using the avatars. Owners also have full rights to transfer their avatars to other Reddit Vaults, as well as to other third-party crypto wallets (ie MetaMask), along with the ability to sell and trade them.

Where to buy Reddit Collectible Avatars?

The initial claim transactions are all done on Reddit and require the Reddit Vault wallet. Different collections have different price points, with most being free to claim (or airdropped), but some creator collections were priced anywhere from $10 to $100 to claim. For paid collections, Reddit offered users the option to pay by credit card, without requiring any interaction with cryptocurrency.

All Reddit Collectible Avatars reside on the Polygon blockchain, where the underlying compatibility for Reddit Vault wallets exists. Currently, the largest secondary marketplace OpenSea, which made major headlines on October 24th when nearly $3 million in secondary volume was traded, is almost completely affected by the Reddit Avatar trade.

To date, there have been ~24,000 Reddit Collectible Avatar sales for a total of ~$6.75 million. Further collection level and summary detail can be found here Dune Analytics dashboard.

Reddit Collectible Avatars can be traded via cryptocurrency, primarily through ETH on Polygon, but USDC is also an option.

Users can transfer or ‘bridge’ ETH to Polygon’s blockchain directly via OpenSea – or follow our guide video.

After stabbing ETH into Polygon and switching the network to the Polygon blockchain, you can begin the process of purchasing a Reddit Collectible Avatar on OpenSea’s Polygon Marketplace.

On OpenSea, every Reddit Collectible Avatar collection has its own landing page, and all 61 of them can be found here.

Some of the top collections by floor price include Spooky Season from poieeeeeee (0.3 ETH floor), Spooky Season from Rojom (0.48 ETH floor), The senses (1.5 ETH floor) and Foustlings (1.6 ETH floor).

The highest recent sales for each of these sets include a 30 ETH Senses sale for “The Hands” #1, a 15.25 ETH Foustlings sale, 5 ETH for Spooky Season by Rojom and 18 ETH for a gold “Midas Touch” Spooky Season from poieeeeeee.

Each of these top sales is for Token ID No. 1, as the series is one of the most highly valued properties.

It can be difficult to navigate the OpenSea Polygon across the different seasons and collections, and a collection page, redditfloor.com, was created where users can browse the cheapest floor listings across all avatar collections. The cheapest listing at the time of writing is 0.019 ETH (~$26).

Why are Reddit avatars valuable?

Some of the Reddit Collectible Avatars have increased by more than 100 times their original price. This raises the question: Why are they valuable?

In my opinion, the answer is primarily linked to the concept of digital identity. In an increasingly digital world, where people spend more and more time online and interact in digital communities, one’s online persona is important. And just as people IRL (in real life) flex their status via fancy cars and jewelry, the same thing happens online.

This trend started with CryptoPunks, the first profile picture project (PFP) that took the NFT community by storm and the first to be widely used as avatars in Twitter and Discord communities. CryptoPunks began to be used as avatars and for digital identity in late 2020 and early 2021, and their rise in price during that time helped start a wave of additional PFP projects, most notably the Bored Ape Yacht Club.

Over the past year and a half, hundreds of 10,000 NFT profile picture collections have come and gone, with only a few dozen remaining relevant. Several have tried to offer utility mechanisms as extra incentives to buyers, but with very mixed results.

While Reddit Avatars offer some utility via the perks their owners have, the main driver of their value is in status and influence. Now traders from the traditional NFT world are entering these projects, buying up the rarest ones (rare defined by the supply, characteristics and serial number of the NFT) and taking up the total floor prices with them.

With the supply of Reddit Collectible Avatars approaching three million at the time of writing, traders speculate that the most elite top-100 Reddit Avatars will be very valuable over time due to their rarity and the desire of top Reddit members who will want to bend them .

What do Reddit Collectible Avatars mean to the NFT community?

There are a few takeaways for the NFT community from the success of the Reddit Avatar project.

First, the technology was completely behind the scenes. Reddit users were able to claim these avatars via simple interfaces, requiring no crypto and with just a few button clicks. The barriers to set up and fund traditional crypto wallets was removed, which facilitated adoption. This is a trend that Starbucks plans to follow suit for its upcoming NFT launch.

Second, the price was free or relatively cheap (~$10) for 99% of Reddit avatars. This is the price point required to reach mainstream adoption and one that will likely be the primary model in the future. A billion users aren’t going to have five-figure prices for profile pictures. Instead, it will happen at free or near-free price points.

The side effect of this trend is that Reddit users do not come for our “bags” (popular 2021-2022 NFT PFP projects), and widespread use of NFT technology does not necessarily mean increased prices of existing projects.

Finally, Reddit does not use the term NFT in its naming convention, opting instead for “digital collectible,” even though these avatars are undeniably NFTs. Unfortunately, the term “NFT” seems to have a very negative approval rating.

But guess what, people like avatars! And they like it when the price of their avatars goes up! And when it’s time to trade them, they’ll likely enjoy the power to control their avatars on the Polygon blockchain in a decentralized way (ie, full control over their avatars without Reddit’s involvement).

Reddit Avatar holders will enjoy the functionality of NFTs, without using the term. Expect the term “digital collectibles” to get a lot more airtime in the near future, but let’s also follow NFT through leader Punk6529’s warning on digital collectibles versus NFTs.

Who benefits from Reddit Collectible Avatars?

Overall, the success of the Reddit Collectible Avatar program is great for Reddit users and is another step in the mainstream adoption of NFT technology.

With that said, even this program has a long way to go based on the early transaction statistics. Some of the early rhetoric around how bullish this event is may be exaggerated if only 3,600 Reddit users have acted. This number does not represent mainstream adoption, as the number is only a small percentage of their ~500 million active users.

The themes and mechanisms Reddit used for this program (technology behind the scenes, low cost of entry, not using the term “NFT”) will certainly be used in the future and should be expected at this point. These were wise decisions and the ones more brands and companies will use when deploying NFT programs.

But perhaps the biggest winner here, and the concept likely to be pushed the most as a result of this program, is digital identity. Widespread use of NFT avatars on the Reddit platform, which has 500 million active users, would be a huge step forward and cement PFPs as a primary use case for NFT technology. And given how intricately linked PFPs and digital identity are, this would be a huge win for both.

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