How did Reddit grow as one of the largest NFT Marketplaces in just 4 months?

Reddit NFT avatars are especially useful for social media because they can be used to prove who you are. “Because it’s the only one of its kind, if I own it, no one else can claim it as theirs. That is very powerful.”

Brian Nguyen calls himself a “whale,” which is a cryptocurrency term for a person who collects non-fungible tokens with high values (NFTs). “I want to buy the more expensive, top-tier ones,” said Nguyen, a Los Angeles-based venture capital advisor.

But the 28-year-old has yet to focus on well-known NFT collections like those from Bored Ape Yacht Club or CryptoPunks lately. He has been buying Reddit Collectible Avatars, a new NFT project from the social platform for communities.

Reddit NFT Marketplace Vaults

Even though Reddit’s NFT marketplace, called Vaults, has only been around for four months, it has already become a $10,500,000 market. With 2.3 million Reddit Avatar owners, the platform has more active users than OpenSea, which calls itself the biggest NFT marketplace. Collectible Avatars on Reddit are different versions of the site’s mascot, Snoo. Active artists make them in the comic and digital art sub-communities on the site. They are usually easy to get and can be bought with a credit card. Their prices range from $10 to $100. But the avatars are selling out fast and spending much money on the secondary market.

So far, Nguyen thinks he has spent more than $100,000 on Reddit Avatars, mostly on OpenSea. He is especially interested in a set of Reddit Avatars called Midas Touch. He has already paid $15,000 each for five of these gold-colored avatars.

What do Reddit NFT avatars do?

NFTs, give people in their communities more social power.

Reddit users use their avatars as their profile pictures, which gives the pictures a glow-like effect when they post in forums. “When you post on Reddit, people don’t know who you are, but an expensive NFT gives you more credibility,” said Nguyen. He thinks of avatars as both a long-term investment and a “social flex,” which is kind of like driving a Ferrari or Lamborghini. And in terms of getting noticed right away, Nguyen said that having an avatar profile picture is like having a blue verified tick on Twitter.

Under new CEO Elon Musk, Twitter is changing its verification system. Andrea Baronchelli, a professor at the City University of London who studies the crypto and NFT space, says that Twitter could learn from Reddit Avatars and use something similar in the future. “It’s a new, flexible tool. “It’s a great way to bring people together,” he said.

A press release says that Reddit chose to store its NFTs on a blockchain called Polygon because of its low cost and commitment to sustainability. Baronchelli said, “The system is simple and works well.” “The fact that the fees are low is a big plus,” Baronchelli said that the use of credit cards as a form of payment makes the process even easier because it ties the abstract idea of the blockchain to something that people use every day. “The most important thing is simplicity,” he said.

Merav Ozair, a blockchain expert and fintech professor at Rutgers Business School, says that the platform’s community is a big reason why Reddit’s NFT success has been so surprising. Most people who use NFTs and blockchains talk about what they are doing on platforms like Reddit, Telegram, and Discord. Ozair said, “This is where you’ll find them.” “Reddit is making something for the people in the community.”

Even though Twitter and Instagram are more popular than Reddit, Ozair said that the Avatar idea could eventually move to these sites, especially since they have already shown interest. Twitter announced in January that NFTs could be used as profile pictures for people who subscribe to Twitter Blue. In August, Instagram started testing “Digital Collectibles,” which let a few creators share NFTs on the platform. Ozair said, “Now that Reddit has done it, maybe they have a business model for how to do it.”

Many companies use avatars as a way to add NFTs, which have also helped Reddit become popular. “I see this all the time. “Right now, everyone is talking about making an avatar. JPMorgan, Microsoft, and big fashion designers are all talking about it,” said Ozair. In February, JPMorgan was the first bank to join the metaverse. It did this by opening a lounge in the blockchain-based world, Decentraland, where people can go as digital avatars. In October, Microsoft announced “Mesh avatars” for Microsoft teams, which are digital versions of those who attend meetings. In 2021, Gucci worked with the social media app Zepeto to make 3D avatars that can wear Gucci clothes.

Ozair says that Reddit NFT avatars are especially useful for social media because they can be used to prove who you are. “Because it’s the only one of its kind, if I own it, no one else can claim it as theirs. That is very powerful.”

Reddit’s new project stands out because it doesn’t use the term “NFT” or any other cryptocurrency jargon. Arun Sundararajan, an NYU professor who specializes in digital technologies, said, “They chose a good way to go with their brand.” “People don’t really know what to think about NFTs right now.” In the past few months, scams and bad financial times have been linked to crypto and NFTs.

Sundararajan said that getting away from this kind of language made the process less scary for customers. “Reddit is holding the user’s hand, which makes it seem like a more natural purpose than something in the blockchain world,” Sundararajan said that after the Internet came along, user-generated websites like WordPress and social media platforms grew out of the idea that most people needed an easier way to join. “It was successful in part because people didn’t want to deal with unreliable technical details.”

Sundararajan said that it has been surprising how hard it has been for users to access NFTs. Reddit made the process easier by using clear language, integrating its new market into a familiar platform, and not bothering or scaring consumers with the technology behind its avatars. “I don’t think many Web3 companies have figured that out yet.”

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