How Reddit Created a Successful NFT Project in Crypto Winter — and What it Means for the Web 3 Landscape
Author: Anjo Cajigal
How Reddit Got to Web 3
Ever since its inception in 2005, Reddit was known as the “homepage of the internet,” where users could contribute to various bulletin board-like groups, or simply enjoy content made by everyone else. Reddit’s central identity as a open and easily accessibly forum has solidified it as a pioneer of self expression in Web 2.0. But Reddit has not stopped with Web 2. In line with the recent Web 3.0 movement and NFT boom, Reddit has released it’s own digital NFT Collection, proving that Reddit is continuing to innovate.
With its success and popularity among casual reddit users gaining renowned attention from major figures within the blockchain industry, Reddit’s NFT collection rediscovered its place on the “homepage” of Web 3.0. When people think of successful NFT projects, they would immediately think of blue chip or luxury projects such as the Bored Ape Yacht Club. Despite taking a completely opposite and contrasting approach to their NFTs, however, Reddit still successfully launched an NFT project in spite of crypto winter. Yet, this is not the only thing that people should focus on, rather the number of members they were able to bring in to the Web 3 landscape through giving members a way to own their online identities on a widely-used social platform and straying away from technical blockchain jargon to make this innovation accessible. Though people would say that blockchain is in its infancy, Reddit’s progress teaches us that the proper step take in creating a Web 3 world starts with accessible mass onboarding.
Reinventing Reddit’s Snoo
Snoo was created by Reddit co-founder Alexis Ohanian during a senior year marketing class at the University of Virginia. His intention in creating Snoo was to create a gender-less and race-less mascot whom anyone could identify with. Since then, the Snoo we all know with red circle eyes, black bear ears, and the iconic antenna became Reddit’s official mascot. Each user who signed up for Reddit were given the chance to customize their own Snoo’s with color, clothes, and even accessories. For Web 2, giving each user a Snoo avatar was their way of self-expression which was unfortunately owned by Reddit through it being centralized.
Fast forward to the present day, however, Reddit now offers users a chance to own their digital Reddit identities by being a Snoo holder. Reddit users could now mint or purchase any of the digital Snoo avatars, and were given the option to make it their profile pictures. At the same time, users could purchase various accessories to further make their avatar their own. This ability to mint a Snoo NFT on the blockchain not only gave users a new way to express themselves on a social platform like Reddit, but also embrace the decentralized aspect of Web 3 and own the unique expression and identity they create.
By allowing users to onboard their unique Snoo to the blockchain, the identity of Redditors which previously lived on a Web 2 platform could now be brought on to other platforms by means of owning it on the blockchain. This gives redditors ownership of the Reddit identity they create on a globally authentically ledger that can be recognized by others. In layman’s terms, Reddit gave Redditors the ability to own a unique digital asset that is a Snoo, and transfer it between other social platforms that support blockchain profile pictures. It takes the identity that one creates around their Snoo from a digital avatar, only available on Reddit’s platform, to a personal, unique, and recognized asset in an interconnected digital web 3.0 economy. In short, Reddit made their online identities in to tangible assets and gave users the chance to actually own their self-expressions on different social platforms. In contrast to how blue chip NFT holders build identities around their NFTs, Redditors could now own their online identities built years ago — given that Reddit has been operating so much longer than any NFT project. This is a very underemphasized perspective which gives these NFTs its true intrinsic value.
“All On-board!”
This collection is also known for the mass adoption it created for both older millennial Reddit users and younger Generation Z members. From holders alone, it was recorded that over 2.5 million wallets were created by Redditors who wanted to mint a Snoo. As of October 24, Reddit’s trading volume on OpenSea reached $8 million which surpassed the overall NFT trading volume of Blur, LooksRare, x2y2, LarvaLabs, and SudoSwap combined. By achieving a feat that no other NFT collection was known to reach, what was so different with Reddit’s Snoo?
It all starts with the way Reddit advertised its collection where they stayed away from using Web 3 jargon. In terms of the way it was worded, Reddit used, “blockchain-based Collectible Avatars,” instead of using the term, “Non-fungible tokens,” which are what they actually are. In the same way, wallets where these NFTs were stored were not called “crypto wallets,” but, “Reddit’s vault.” Because of this, Reddit was able to help users not familiar with the Web 3 space understand what they were purchasing.
Contrary to other popular NFT collections, Reddit NFTs were also primarily minted with fiat payment methods. By being able to mint with just credit and debit cards, Reddit was able to onboard users who have never held crypto tokens. In some collections, there was sometimes even no cost to minting. Purchasing with cryptocurrency tokens were only required when purchasing from third-party marketplaces like OpenSea. Regardless of this, using fiat payment methods effectively lowered the barrier to entry which was able to onboard a lot of Redditors.
Reddit’s unique NFT platform is also able to cater to various content creators. On OpenSea, the designated marketplace of Reddit Collectible Avatars, collections are named in the format of Username x Reddit Collectible Avatar. This is because various Redditors are able to create their own Snoo collections as long as they submit their art. At the same time, an OpenSea page is automatically made for each collection which allows third-party access and arbitrage immediately after the collection is minted. This platform allows for market growth while giving room for moderate product differentiation. Nevertheless, Reddit was able to create a way content creators could own their collections based on their unique takes of Snoo.
Future Outlook
With Web 3 being in its infancy, Reddit was able to successfully onboard a lot of users who were previously not involved with the space. They were also able to lower barriers of entry while serving both retail consumers and content creators. Looking ahead, it’s important to consider how Reddit would sustain its NFT collection.
Having a large user base could be both beneficial and detrimental depending on how it is approached. It could be beneficial if their user base is always engaged. They could look into creating tangible benefits which would have actual intrinsic value in the long run. At the same time, they could look into capitalizing on partnerships with larger Web 3 organizations. Their 4 million and increasing user base would be a great asset to any organization they partner with.
However, it is important to consider that a large user base would entail a proportionally large cost in providing these benefits. Axie Infinity, an NFT game that dealt with a user base almost as big as Reddit’s was unable to foresee the costs of having a large user base which led to an over inflation of its game’s native token. Though an NFT game and an NFT project isn’t necessarily comparable, the cost of providing tangible benefits would only vary proportionally.
At the same time, Web 2.0 companies have a poor history of NFT integration. Last March 2021, Twitter went viral for the sale of its first ever NFT which was the first ever tweet by co-founder Jack Dorsey for a sum of 2.9 million USD. As of November 2022, however, the highest bid on this NFT is only 280 USD — with over 2.899 million USD of fiscal value wiped over within 20 months. From this, Reddit should learn from this failed exploration of Web 3 by a Web 2 company, and focus on creating create real tangible value from their NFTs.
Regardless of all of these, Reddit has done a great job in bridging Web 2 elements in successfully onboarding new Web 3 users. By being able to distance itself from being called NFTs, Reddit was able to create a successful NFT project despite the anti-crypto culture its users uphold. Yet, its true value lies in how they gave their users an ability to own their decade-old online identities and use these identities among different platforms as well. In creating intrinsic value for the long run, Reddit should look into developing a sound road plan for their project. In the greater scheme of the Web 3 landscape, Reddit’s forage into Web 3 provides lessons in creating a large user base for DAOs and NFT projects.
