Inside the Reddit NFT obsession
Reddit’s latest NFT project prompted over 3 million users to set up crypto wallets through the platform. [SOPA Images via Getty Images]
There’s never a dull moment on the blockchain. Here’s what you need to know this week:
Reddit NFTs are booming despite the bear market. A closer look at Reddit Collectible Avatars and why they are outpacing rival social media NFT projects.
4 digital security tips. October is Cybersecurity Awareness Month, so it’s time for a crypto security crash course.
Noteworthy numbers. What is a “web3 phone” and how much does the most expensive one cost? Plus other key stats to know this week.
RED CRED
How Reddit NFTs became the hottest new trend of crypto winter
Reddit has long called itself the front page of the internet, but the social media mainstay might be vying to be the front page of the cryptoverse — or at least the NFT-verse. The NFT market is currently down a staggering 97% from its January peak, but many bright spots continue to emerge. Case in point: Reddit NFTs have dominated crypto conversations this week after they generated $2.5 million in daily trade volume, and prompted 3 million people to sign up for Reddit NFT wallets. But what exactly is Reddit’s NFT collection, why is it so popular, and how is it different from other social media companies’ web3 attempts? Let’s dig in.
What is Reddit’s NFT project and how does it work?
First teased in 2021, Reddit’s Collectible Avatars are NFTs modeled off of the online forum’s alien avatar logo (their cute mascot named Snoo) that can be used as your profile photo on the platform.
To own a Collectible Avatar, you first need to set up a Reddit Vault wallet, which is powered by Polygon, a layer-2 blockchain.
Reddit partnered with independent artists on the platform, who designed tens of thousands of unique versions of Snoo. Reddit’s Collectible Avatars have sold out on their marketplace, but secondary sales of the collections are available on OpenSea.
Owners of multiple avatars can further customize profile pictures by using the site’s “avatar builder” to mix and match traits from their collection. Profiles also get a special visual treatment when users comment on posts, and Reddit gives NFT holders rights to display their Snoos anywhere on or off the platform.
Why are Reddit’s collectibles seeing more success than NFT initiatives from social media platforms like Twitter and Instagram?
Facebook, Instagram, and Twitter all have NFT integrations (and various, struggling web3 projects), but those initiatives focus on “showing off” NFTs purchased from marketplaces and adding your favorite as a profile picture. Meanwhile, Reddit’s NFT marketplace makes it a direct participant.
Reddit’s strategy also focuses on its community by granting additional features to NFT owners and supporting creators — many of the artists behind the designs for the avatars were found directly on popular subreddits, like r/Comics and r/AdobeIllustrator. The company is also airdropping free NFTs to some of the most active users on the platform.
Polygon’s role in the effort is also key. As a layer-2 blockchain, Polygon is compatible with Ethereum, while also allowing users to transact more quickly and for far less in network (gas) fees, thereby addressing two major barriers to crypto adoption.
So, just how popular are Reddit’s Collectible Avatars?
Extremely popular. Millions of wallets were created to purchase from a supply of about 40,000 collectibles. Monday alone saw more than 16,000 Reddit NFT sales at an average of $206 per sale, which generated more than $3 million in sales volume. Overall, the highest sales came from Reddit’s earliest collection, released in July 2021, with one NFT selling for 115 ETH.
Based on numbers revealed by Reddit Chief Product Officer Pali Bhat, Reddit has more than 3 million connected wallets, more than the leading marketplace, OpenSea, which has about 2.3 million users.
Why it matters… “Bear markets are for building” remains a guiding principle for many in the crypto industry during the current bear cycle. Even as NFT sales volumes have plummeted this year, Reddit’s success highlights the potential for NFTs — particularly when creativity and community are priorities for projects. Meanwhile, Reddit is likely going to continue to capitalize during the downtrend — astute users have noticed that the company has started teasing its Halloween avatar collection.
SECURITY BRIEFING
4 security tips to help you keep your crypto safe from hackers
If a hacker had your DoorDash password, how many other accounts would they be able to access? If your answer is more than zero, it’s probably time to improve your password hygiene and fortify your digital accounts. For Cybersecurity Awareness Month, we’ve put together a crash course for protecting your crypto and all the other valuable data you store online. Don’t stress, we’ve got you covered.
Use a password manager. Humans are really bad at remembering passwords, which is why too many of us choose simple phrases and repeat them across multiple websites. Password managers (like 1password and Dashlane) generate strong, secure passwords and store them for you — no memorization required. (Want to see if your passwords have been exposed by a known data breach? Check out haveibeenpwned.com.)
Enable 2-factor authentication (2FA). 2FA can protect an account even if a hacker steals your password. There are several types of 2FA, ranging from less secure (SMS-based, where a verification code is sent via text message) to more secure (an app that generates verification codes like Google Authenticator) to most secure (a hardware security key like a Yubikey). We recommend choosing a stronger method than SMS, because hackers can steal texts with a common method called “SIM-swapping” — in which your phone number is transferred to another device. If no other option is available, enable SMS 2FA —and if that’s not possible, consider using a different service.
Protect your seed phrase. A seed phrase is a string of 12 to 24 words that is literally the key to a non-custodial crypto wallet like Coinbase Wallet or MetaMask. Anyone with access to your seed phrase has access to the crypto in that wallet. If you lose or delete your wallet, you can restore it with your seed phrase — but if you lose your seed phrase, you lose your crypto. (For many users, keeping crypto in the “hosted wallet” that comes with every Coinbase account is a more convenient option. You can add another layer of security without having to manage seed phrases by moving some crypto into a Coinbase Vault.)
Don’t brag. In the sage words of Kendrick Lamar: be humble. Just like a brand new Lambo in your driveway could make you a target for burglars, flashing your gains (or losses!) online could make you a target for cybercriminals.
NUMBERS TO KNOW
$1.8 billion
The total amount of royalties that have been paid to creators of Ethereum-based NFTs, according to a new report from Galaxy Digital. Ten major NFT collections account for 27% of all royalties — Bored Ape Yacht Club parent company Yuga Labs is in the top spot with about $150 million. Royalties have long been touted as a benefit for NFT creators that allows them to earn money anytime their work is resold.
$41,000
Price for the most expensive model of a mobile device called the Metavertu, a “web3 phone” that can run its own blockchain node and turn photos and videos into NFTs with a single click. Smartphone manufacturer Vertu’s extravagant tech also boasts 18K gold and diamonds, “Himilaya Alligator leather,” 1TB of storage, and 18GB of RAM. The most reasonably priced Metavertu? The “calf leather caramel brown” with 512GB, which will only burn a $3,300 hole in your pocket.
7.5x
Wealthy investors ages 21 to 43 are 7.5 times more likely to hold crypto than those 43 and older, per a new survey by Bank of America that gauged the investing attitudes of Americans with over $3 million of investable assets.
AROUND COINBASE
Our $1.6 billion partnership with MakerDAO, Pomp’s chat with Brian, and the latest updates from Coinbase
This week the MakerDAO community approved a Coinbase proposal that will allow the decentralized finance (DeFi) protocol to earn rewards on their treasury holdings of USDC. Coinbase’s proposal to custody up to $1.6 billion USDC with Coinbase Prime reflects its “commitment towards the growth of the overall stablecoin ecosystem and empowering the DeFi community and its users,” a blog post announcing the news explained.
In other USDC news, Coinbase has announced that it is waiving commission fees when customers buy or sell USDC via any fiat currency on Coinbase. Establishing global parity for all users will help accelerate adoption of USDC outside of the United States and support Coinbase’s mission of increasing economic freedom in the world.
In the latest episode of Around the Block, Coinbase CEO Brian Armstrong hosts entrepreneur, investor, and podcast host Anthony Pompliano, known to many in the crypto world as "Pomp.” The two discuss how they’re thinking about Bitcoin amid current market conditions, their long-term predictions for Ethereum post-Merge, censorship in tech, and even the names of Brian’s cats. Give it a listen here.
Calling all Trolls and “Sim City” fans: Dreamworks Trolls VOX are digital collectibles that will live in the “VOXverse,” a soon-to-launch metaverse created by Will Wright, the mind behind “The Sims” and “Sim City.” Head to Coinbase NFT to mint a VOX today and participate in special VOXcoin rewards and gameplay.
TOKEN TRIVIA
What is the most secure form of two-factor authentication?
A
Authenticator apps
B
Hardware keys
C
SMS codes
D
Face ID
Find the answer below.
Trivia Answer
B
Hardware keys
