Reddit

Reddit has taken the plunge into crypto recently as it introduced a custom NFT marketplace on?Polygon, with more than?5 million?NFT avatars minted. As?Decrypt?noted last month, NFT trading in November was down about 88% from January numbers – but Reddit’s NFTs have largely bucked this trend. After announcing plans to launch last July, the initiative has proved to be hugely popular. To further integrate the avatars into their community, Reddit has also?airdropped?the NFTs to their most active users – those who have earned a significant amount of?karma?points are eligible.?

Reddit NFTs. Source:?Decrypt?and Reddit

Reddit partnered with independent artists for their “Collectible Avatars,” limited edition avatars backed by blockchain technology. The company has also launched other custom avatars,?working?with Netflix (avatars from Stranger Things), Riot Games (League of Legends), and the Australian Football League, among others. Reddit collectible avatars are?purchasable?with fiat currencies, but are also available for trading on?OpenSea. According to?Reddit, Polygon was their chosen blockchain due to its “low cost transactions and?sustainability commitments.” Users are?able?to store their avatars on Vault, a Reddit-created wallet.?

Reddit x AFL. Source:?AFL & Reddit

According to?Dune Analytics, 7.8M collectible avatars exist with 5.6M unique holders, and there are 4.1M single collectible avatar holders. This wide distribution of holders is largely opposite to many collections in existence today: for example, in the CryptoPunks collection, 1,410 Punks are?owned?by just 10 wallets.?

Reddit collectible avatar unique holders has grown significantly over time. Source: Dune Analytics

Sales volume has also surged over time, from around $838K of volume in early October to over $12.26M in early January

Collective avatar sales volume over time. Source:?Dune Analytics

Reddit also recently?launched?Community Points using Arbitrum Nova,?Offchain Labs’?new L2 designed for dapps with high TPS, such as social and gaming dapps. Reddit rolled out?Community Points?three years ago and?announced?Arbitrum as their partner to scale the product in mid-2021. With Community Points, users are?rewarded?for their contributions and given access to Special Memberships and awards, and, in Reddit’s words, “encourage better content and conversation.” In each subreddit, Community Points are?displayed?next to usernames, making them a public reputation-based metric and further incentivizing Reddit activity. Users can also leverage Community Points to purchase Reddit Coins that can only be?used?in a given subreddit.?

By integrating blockchain technology into their platform, Reddit is better able to achieve transparency, decentralization, and be more community-centric. As Steven Goldfeder, Arbitrum’s CEO,?said: “One of the beautiful things about Reddit doing community points on Nova is that it’s an open public network where anyone else can launch points, contracts, and applications on.” Reddit’s launch of Community Points as well as their push into NFTs are an example of how social platforms are increasingly leveraging blockchain to support their initiatives.?Instagram,?Twitter, and others have also been adopting blockchain technology at rapid speeds, but Reddit has especially stood out in this regard and it will be exciting to see what the company does next in the context of web3.?

Paul Veradittakit

DISCLAIMER

Pantera Capital Puerto Rico Management, LP and its affiliates (“Pantera”) makes investments in crypto assets and in blockchain-related companies.?Pantera and/or its affiliates or personnel may be an investor in, or have relationships or other business arrangements related to, certain instruments, companies and/or projects discussed herein.?This document does not contain any advertisement for Pantera’s investment advisory services, or any other services or products, whether provided by Pantera or otherwise.?The information and opinions presented in this document are solely those of Paul Veradittakit; they do not represent, and should not be interpreted as representative of, the views of Pantera or any other individual working for Pantera, and do not represent investment, legal, tax, financial, or any other form of, advice or recommendations.?Neither Pantera nor Mr. Veradittakit is acting, or purports to act, as an investment adviser or in a fiduciary capacity with respect to any recipient of this paper.?Information contained in?this document?is believed to be reliable, but no representation is made regarding such information’s fairness, correctness, accuracy, reasonableness or completeness.?There is no obligation to update this document or to otherwise notify a reader if any matter stated statement or information contained here changes or subsequently is shown to be inaccurate.?Nothing contained herein constitutes any representation or warranty as to future performance of any financial instrument or company.?Forward-looking statements should not be relied upon, and performance or outcomes may differ materially from what is contemplated herein.?Opinions included here incorporate subjective judgments or may be based on incomplete information.?This document does not constitute or contain an offer to sell or a solicitation to buy any securities or a recommendation to enter into any transaction, and no reliance should be placed on this document in making investment decisions.?