Reddit avatars explained: Why are these NFTs increasing in value?

While some Reddit Collectible Avatars were available for purchase when the NFTs launched in July, many have also been distributed for free to the social media’s most active users.

What are Reddit Collectible Avatars?

NFTs are reaching a new audience – this time through Reddit.

The social media giant’s Reddit Collectible Avatars collections have stolen the crypto limelight this week, racking up $2.2 million in trading volume on leading NFT marketplace OpenSea in the past 24 hours.

After an initial release earlier this year in July, the avatar NFTs received little attention from Reddit users or the wider crypto community. However, in recent weeks many active Reddit users have started receiving collectibles for free. This, combined with several recently released Halloween-themed collections, has helped interest in the avatars grow.

Each Reddit Collectible Avatar is imprinted on the Polygon blockchain and can be used on social media as the user’s profile picture. Avatars also provide additional benefits, such as the ability to mix and match clothing with other avatars and a glowing effect on user comments.

While some Reddit avatar collections, like “The Singularity,” have supplies in the millions, others are more scarce. This has led to coveted avatars increasing in value as interest in the NFTs increased this week. Currently, the highest rated avatars seem to be from the Sys32Template “Spooky Season” collection. Examples from this small group of 210 NFTs have sold for as much as 2.8 ETH—roughly $3,700.

Another Spooky Season collection by poieeeyee currently holds the top spot for the most traded NFT collection on OpenSea in the last 24 hours. Since its launch on October 24th, the 1,800 NFT strong poieeeyee collection has reached a trading volume of over $1 million. However, it’s not just these Halloween-themed examples that are seeing success. The Foustlings collection, part of the first Reddit Avatar series released in July, has more than quintupled in value this week. On October 22, a Foustlings avatar would have set collectors back 0.31 ETH. Now, the same NFTs regularly sell for as much as 1.65 ETH – a 432% increase in the floor price.

While many in the Reddit community are ecstatic about their newly received and often valuable avatars, die-hard NFT fans seem to have missed out on the excitement. Reddit Collectible Avatars have been known in NFT circles since their launch in July, but largely ignored. Now they’ve skyrocketed in value, leading many to question what made these Reddit avatars attract so much attention.

Why Are Reddit Avatars So Popular?

Reddit’s NFTs have succeeded for many of the same reasons as other avatar projects, such as Bored Ape Yacht Club or CryptoPunks.

On Reddit, the avatars are easily visible and allow users to show off their wealth and customize how other posters see them. Giving users the ability to customize how they look online in exchange for a fee is not unique to the crypto space or Reddit. For years, popular online games such as Counter-Strike, League of Legends and Overwatch have sold cosmetic items or character “skins” to players via in-game purchases. In this sense, Reddit avatars are familiar to users who have been willing to pay money for cosmetic items elsewhere online.

However, there are other reasons why Reddit avatars have seen success. The social media site already has an established user base numbering in the millions, meaning its collectibles will appeal to more than the average NFT collection. In comparison, many “crypto-native” NFT communities attempt to build a community around their avatars from scratch, and while some succeed, many more fail.

It’s also worth noting that Reddit Collectible Avatars have been purposefully marketed without using any crypto jargon. Crypto wallets have been replaced with “Reddit Vaults” and the term NFT has been dropped in favor of “Digital Collectible.” While it may seem like an insignificant change to those used to using crypto and trading NFTs, to the uninitiated, it has made a huge difference in terms of accessibility.

Additionally, the specific decision to avoid calling the Reddit avatars “NFTs” has helped their adoption. NFT has become a dirty word among many art and gaming communities in recent months. The term has acquired several negative connotations ranging from excessive energy use to fraud and even money laundering schemes. On the other hand, “Digital Collectible” is easier to understand, doesn’t come with the baggage that “NFT” does, and has probably helped with users who were previously skeptical of blockchain technology.

But while all of these points may be true, some have taken a more cynical approach to the Reddit avatar hype. Coinshares CSO and Crypto Twitter personality Meltem Demirors has positioned that the popularity of Reddit avatars among the non-crypto community can simply be explained by the status and value they provide. “Reddit NFTs prove that everyone loves being an insider to a new thing that gives them status and makes them money,” she wrote. “ppl don’t actually hate NFTs or crypto, they hate that people who aren’t them get status and wealth from it because they think they deserve it more.”

Whether you love them or hate them, the Reddit Collectible Avatar collections prove that anything can be successful if marketed correctly. Reddit has found a winning formula that turns a poorly understood technology into something even those with no prior knowledge of crypto can enjoy and participate in. Other companies, both in the crypto space and beyond, will likely be watching closely so they can try to replicate Reddit’s success.

Disclosure: At the time of writing this piece, the author owned ETH, BTC and several other digital assets.