The Reddit NFTs Thesis
The reddit-pill: a text-based metaverse, customizable drip monsters, & ...
Update (As of 28th August, 2025)
The Reddit team has announced that they’re sunsetting the Avatar project.
This stings quite a bit, not because I invested (and I guess subsequently lost) a fair chunk of change on this bet, but rather that I believed that Reddit (out of all companies) had a real shot of actually pulling this off and being a widely accepted way of creating, advertising & selling these Collectable Avatars. This also marks the only instance where I’m making an edit to a published post.
You can still read the entry below, the ideas, rationale and logic followed almost 3 years ago, but the bottom line is that the vision painted by me will never materialise and will ultimately be left off as “What could’ve been”.
Axew, you were correct.
Over the weekend, I was doing my daily readings and stumbled across Reddit NFTs. These weren’t new to me as we have already covered them in a previous Page One post, but they just happened to have released their 2nd generation of NFTs a couple of days ago. What caught my eye was the fact that while Gen 1 NFTs took months to sell out completely, Gen 2 sold out in ~24 hours. So with that, I began to look deeper into the Reddit NFTs, coming to a simple conclusion; Why the hell don’t I have any?
I laid out the quick thesis for a few of my groups (like the message above) and then on my Twitter account, I tweeted out that Reddit NFTs are a diamond in the rough and now would be a good time to accumulate them for a potentially long-term lucrative play. Then, I started buying them in bulk. It just so happens that my wave of buying alerted a lot of people who were noticing the activity in Reddit NFTs explode as a result of a random NFT person “sweeping” them. Around 24 hours later, I tweeted out that I’d commenced my buying.
When I tell you the volume for Reddit NFTs exploded after I finished my buying, it would be an understatement. While employing humility and humbleness in your nature are good character traits to have, I’m still gonna write for the record that my buying spree validated the Reddit NFTs market for a lot of NFT/Crypto people to buy these NFTs and the subsequent ballooning of volume. The good thing about the blockchain is that you’re more than welcome to check the data for yourself too.
You’re welcome, Reddit Avatar holders btw. It is now you, who dump on NFT and Crypto people ;)
As I’m typing this out, my sizeable bet has ballooned up to a return of over 200% (more than 3x) in just under 48 hours. What I’m about to dive into is the exact thesis that I formed prior to buying these, and why I’m frankly more bullish on these NFTs than most projects that exist (or will even release in the near to long term future). I most definitely won’t be selling any of these NFTs anytime soon too. If you want to know my buying history, you can view them here.
Get yourself a comfortable place to sit (maybe with a hot drink) & let’s begin.
For starters, what are my credentials and why should you listen to one more random person telling you about Reddit NFTs? Good question, hypothetical reader. I’ll answer that question in two parts for two different crowds.
NFT/Crypto Stats
These are my stats from Degenscore over the past bull run. While this should be enough, I’m also helping foster the NFT community over in “The One” and that’s where my fellow co-writers (Terv0 and Tolks) also got together to ultimately create Page One.
Reddit Crowd
I’ve been a Redditor for nearly 10 years now. While that is nowhere near as long as some of you will be, I was trading $DOGE for steam games, posting about my Physical Dogecoin and even updating the entire dogecoin subreddit about taking a break due to exams all the way back in 2013. Good and innocent times, really.
Dogeconomist Flair too. Young Boffin had a way with words
TL; DR. I have skin in the game for both these mediums and can use my previous experiences as both a Redditor and an active crypto builder to lay out my thesis.
With the introduction out of the way, let’s begin. As you will have seen from the title, this concerns the cool kid on the web3 block; Reddit NFTs. Reddit themselves don’t call these NFTs but rather “Collectible Avatars”. This alone shows a superior understanding of the medium as for the past year, we’ve seen countless artists outright villainize the term NFT, and associate it with killing pandas or smothering the masses due to its power usage. Even though ETH has now moved successfully to the Proof of Stake (PoS) mechanism, the lingering mentality is still that of jpegs killing the planet.
+1 point for Reddit.
Before we dive into the specifics of the Reddit NFTs, we need to take a step back and look at Reddit itself. Unless you’ve been living under a rock since you got access to the internet, Reddit is a “social news aggregation, content rating, and discussion website” or in simpler words, the world's largest forum platform. The platform is a melting pot of trends, media, micro-communities, micro-cultures, and inside jokes. This is mainly facilitated by “Subreddits”. Whatever your interest or niche, a subreddit of it probably exists. Gaming enthusiasts go to /r/Gaming (or my preferred /r/PCMasterRace), Meme enthusiasts browse /r/DankMemes, People who need to be in therapy use /r/CryptoCurrency, and so on and so forth.
How big is Reddit?
It’s colossal.
It’s the 5th most visited website in the US (More popular than Instagram, Twitter and even “The Hub” for that matter). It has 430 million active monthly users, more than 1.5 billion registered users and averages 50 million users daily. Even by Web2 standards, Reddit is a behemoth. As mentioned earlier, there are a lot of subreddits too; more than 2.8 million of them. This doesn’t even begin to go into the cultural impact that Reddit has had over the years (/r/WallStreetBets anyone?), and trying to analyze that will be its own big undertaking. For all intents and purposes, Reddit is the perfect microcosm to test out how NFTs will be received by the mainstream. You could even argue that Reddit itself is the adoption barrier that needs to be breached for full mainstream adoption but let's not get ahead of ourselves.
With that said, let’s take a deep dive into Reddit and its foray into NFTs. Reddit actually got into NFTs in June of 2021 when they launched “CryptoSnoos”. Only 4 have ever been released and they’re all 1/1s. They are (and were originally sold for):
The last 1/1 NFT being sold in August 2021, it would be 8 months before Reddit would launch “Generation 1 Collectible avatars” in July of 2022.
Looking at the Collectible Avatars vs Cryptosnoos, there are a few key differences:
While Cryptosnoos have launched on Ethereum, the avatars actually launched on Polygon.
Unlike Cryptosnoos which are 1/1, Avatars are edition based ranging from as low as 100 to as much as 1000+.
You can also get a free NFT, for which Reddit themselves will pay for your minting costs. This is how Reddit has managed to create and onboard 3 million people with polygon wallets (even if the user doesn’t know it, but we’ll get to this point in a second).
If we analyse using Reddit NFT-centric tools (Redditfloor.com), we can also see that there are currently 169 separate collections, which have the previously mentioned range from 100 to 1000. At the time of writing, this amounts to a grand total of 86,000+ NFTs. While this may seem insane for a collection, what you have to realise is that this total was reached by 2 separate generations (or Seasons).
86,000 NFTs have been sold on the primary markets and are currently minted & exist on the Polygon blockchain. That’s a feat that no NFT project has been able to achieve. Primary sales flow is also done differently than most NFT mints, and this is one of the steps where Reddit will leverage its existing technological stack.
The way these Avatars are sold, it's not explicitly mentioned that these are NFTs. They’re simply Limited Digital Avatars. The consumer uses normal credit/debit cards (and even Apple/Google pay) for primary sales which reduces friction to adoption. As stated before, NFTs don’t have a great perception so a quick rebrand paired with payment rails that are known to your consumer can shift the Overton window.
Why bother buying these NFTs/Avatars in the first place?
Well, there is the web3 approach of showing off the avatars but that only applies to entirely randomly generated NFTs. If you’re paying attention, you will have noted that Reddit has offered multiple editions of the same NFT. Apart from Cryptosnoos, there aren’t any 1/1 offerings to make you stand out from the other person. Or is there?
Enter the second part of Reddit NFTs; Personalisation. While this isn’t something new that the NFT space hasn’t seen before (We’ve had projects like Avastars, Queen+Kings by Hackatao and even the now defunct Ethlings), they haven't been offered at this scale before. How most of these projects actually minted initially was that each NFT would be randomly generated from a pool of traits which would be bundled together to make your initial (genesis NFT). You can then take the traits that you like from your genesis (and buy/trade other NFTs) to make your perfect NFT. Reddit has taken a different approach entirely. By making each and every Avatar Semi-fungible, in owning the NFT you can now use the traits that the entire NFT has for your own personal avatar.
A simpler way of looking at this would be with an example. One current Reddit NFT that is popular is “Midas Touch”. As you can see, it’s entirely gold and it dons a “Golden Crown” among other golden traits. If you check how many of the Midas Touch’s exist in total, there are only 114 of them. This means that there are only ever going to be 114 Golden Crown, Body, Background, Pet, and Lower that is tied to this NFT.
To use these traits, you need to own the entire thing. You may only want the crown, but now there is one NFT less with all the other traits as a result of you owning the crown. It’s a different way of rarity trading and showcasing. If you want a custom Avatar, you need to buy multiple different NFTs to craft them. While you have the base NFT, you can mix and match whatever you want your avatar to look like. This is something a *lot* of NFTs can’t offer. If you’re a Dota 2 player (or any game where you can mix and match items from different sets), this will feel right at home.
Alright, with those basics mostly out of the way (if I’m missing something let me know on Twitter), let's actually get into the thesis part.
Blue Ocean Strategy
Why do I think that Reddit NFTs are a good buy (NFA, you guys know this). Well, for starters the sheer size of the Reddit userbase is one. 430 million active users is a big pool. As we know, it’s harder to acquire new customers than it is to convert an existing customer, so, from an NFT-only growth angle, Reddit NFTs have a long way to go. This is what you would call a “Blue Ocean strategy”. If you want actual deep market penetration, while BAYC and Cryptopunk make the headlines, they are restricted with the number of participants they can have (10-30k participants vs a hypothetical TAM of 430 million active users). Reddit will most definitely drop free NFTs and rumours have it that there will be a free "Football World Cup” themed drop for the occasion as well. Onboard people with free themed NFTs, for them to then delve into the expansive ecosystem and convert them is a sound hypothesis.
![r/avatartrading - [Leak] Reddit is releasing a very limited FIFA World Cup 2022 Collectible Avatars](https://substackcdn.com/image/fetch/$s_!0e3o!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fc66dece8-6eff-4f5e-af48-cba2492de5e6_960x961.jpeg "r/avatartrading - [Leak] Reddit is releasing a very limited FIFA World Cup 2022 Collectible Avatars")
Metaverse Redefined
Coming back to what “Reddit” is at its core, which we’ve defined as “social news aggregation, content rating, and discussion website” or “The Internets Forum”, indulge me for a second. Getting rid of all these tags and treating each subreddit as its own “island” where like-minded people gather to discuss their respective niches, Reddit itself acts as an ‘ocean’ which binds all these niche islands together.
Funnily enough, Reddit is more of a metaverse than 99% of web3 (and even web2) firms that have claimed to be creating their own metaverse. The big difference here is that it’s almost entirely text-based. With the addition of NFTs to their platform, I’d wager they have this expansion in mind. The metaverse was never going to be invented, it already exists. It was always going to be adapted for.
Blockchain Obfuscation
One of the most powerful things that Reddit has seemingly accomplished (at least at first glance) is the fact that the experience they provide for buying (and subsequent minting) is unlike most NFTs. They also avoid using NFT and crypto terminology, opting rather to use more traditional verbiage. With the perception that NFTs are bad, ‘Collectible Avatars’ are something which most people can relate to at a personal level. You can collect coins, cards, books, stamps and a lot of other things, so why wouldn’t that work with Digital items?
Again, this is fundamentally an NFT, but what Reddit has correctly done is treat NFTs as the backend delivery mechanism for an expansion of physical collecting to digital collecting. What does this enable? Oh, you can buy limited edition collectables which the artists get paid for? That’s neat. Wait, you can sell these collectables to other people and the artist gets paid automatically too! Wow, that’s so cool!
If you’ve been an NFT participant in the bullrun, you’ll know that none of this is new, nor is this any different from what NFTs currently offer now. The change here is that this has been seamlessly integrated into a platform which wants you to stand out with your Karma points and badges to provide you with the means to make a name for yourself. In that light, these collectables are simply a cool addition which has utility (Side note, Reddit NFTs have more utility now than most NFTs projects have built a roadmap for). Hell, an airdrop has already happened too for these NFTs. Artist Fattybagz has already commenced the first-ever airdrop with other artists also confirming that they’re planning airdrops too.
Cosmetic Game Economies Emulation
Bear with me on this as this will be new to quite a few people. Back in 2013, Valve released the “Arms Deal” for its FPS game “Counter-Strike: Global Offensive” (CS:GO). This update randomly dropped crates after a match was over, which the players would unlock using keys to get cosmetic gun skins. What this allowed the players to do was to equip these gun skins and use them in-game vs other people. As you can imagine, the rare ones garnered attention and they became a status symbol quickly. Why I mentioned CS:GO specifically is while a lot of games allow the trade of items with other players, Valve allowed the sale of these skins for fiat (to be used within the Steam ecosystem).
This changed the entire trading dynamic in a way that wasn't possible before. These skins had a monetary value, a marketplace of willing participants, and through the use of 3rd party websites it was even possible to sell your skins for actual money in your PayPal/bank account. They’ve been dropping these crates somewhat regularly for the past 8 years and it’s so popular that there are entire communities/youtube personalities that have been created from this. Just type in “Skin Unboxing CSGO” on YouTube and you’ll be flooded with thousands of results. Why does this matter?
These crates are retired and replaced every so often and in doing so, the supply completely stops and the collection is capped. The earliest collection commands a respectable premium (if you can even buy them). Below are the stats from the earliest collection and while they don’t look as good or polished as the new skins released, seeing the AWP or AK-47 in-game is a rare sight and touted as collector items. Due to time and the steam platform, some people never logged back in, some were banned disbarring them from trading, and some are in collectors' personal accounts making them extremely difficult to acquire.
That’s the stage where I see these Reddit NFTs right now. Gen1 and Gen2 are early and given the staying power of Reddit, they’re not going away anytime soon. In a few years’ time, Gen 1 NFTs will be some of the most coveted NFTs simply because they’re the genesis collection. Some look better than others and there will be a couple of rare/coveted collections in future releases too, but, percentage-wise, early NFTs will be desirable. I can already bet some of these minted NFTs will never move as the account holder will have lost their account passwords, forgotten about these or even passed away. The thesis is a long-term one. The genesis NFTs become more desirable in parallel with the more NFTs released and the longer Reddit lasts. They have the capital and manpower to build, and the users to convert.
Testbed for Web3 Toe Dipping
NFTs have been all the rage for a while now and this especially includes corporations (be it indie or web2 giants). The problem they’ve had so far is that while a lot of them see NFTs for their potential, they also fear the backlash they will get without confirmed profits. Backlash without profits is a net negative, but creating revenue despite some customers being vocally against them means that there is a larger appetite for the product than the loud minority.
This is where Reddit would come in as an “Accountability Buffer”. Rather than spending time, effort and resources to develop your own web3 strategy, why not test and validate the markets first? Partner up with Reddit for a series of drops, launch within your already populated subreddit and see what the reception is like. If it’s good (primary + secondary analytics), then you can push forward and develop your standalone product. For bonus points, add utility for Reddit NFTs when your platform launches, giving you an already onboarded Web3 user base rather than starting from scratch.
If it goes horribly, you’ve validated that the timing or strategy wasn’t correct and have the ability to reassess your hypothesis for a lot cheaper. So, who does this apply to? Largely the name brands. Think Disney, Netflix (and their various IPs), Fashion Houses like Burberry, Gucci, Balenciaga or even celebrities with their ventures. With the existing system of avatar customization in place, why can’t your avatar wear a “Stranger Things” Demogorgon headgear, with a Burberry coat on the planet of Tatooine, wearing Yeezy 350s? Call it the Drip Monster while we’re at it too.
Reddit’s Continued Support
Unlike a lot of existing NFT projects, Reddit has vast capital and manpower to create virtually anything they want. The biggest update that has yet to happen (at the time of writing) is the launch of a Reddit Integrated Marketplace. Right now, the NFTs that are being traded have a complicated process of being from Reddit's created Vault address to the seller's existing address. You can learn how that works here from Reddit itself. As you’ll see it’s not as easy as buying these NFTs. This is a problem that will be fixed and in doing so, they’ll onboard even more people. While this will probably make prices drop of the existing collections (as more supply is easily unlocked), this allows for faster distribution which enables the market to decide the true price of these NFTs.
But why just stop at a marketplace? Give these NFTs more utility in the form of airdrops, competition eligibility, IRL event access and so much more. Again, these aren’t “NFTs”, they’re “Collectible Avatars”. Another good thing about Reddit (a company once valued at $10 billion) backing this technology is that the fear of a “rug pull” is virtually non-existent.
Further Blockchain Adoption
This is something that I was actually surprised to find out. Reddit has an entire blockchain governance stack which they’re building out (on the Arbitrum NovaChain). Similar to how DeFi protocols use snapshot for Governance and DAO voting on related matters, Reddit has seemingly built a similar product in a way that fits in with their existing product. While I urge you to read the entire documentation to fully understand the implications, I'll list the bullet points that are important in my option with quick explanations:
Reputation & Governance
In subreddits that have this enabled, point balances can be displayed next to usernames on posts and comment threads. This allows people to quickly identify the users who have been part of the community for the longest time and contributed the most.
People who have contributed more to the community and earned more points are able to have a larger say in the direction the community takes. This is done with weighted polls. The more points you earn (not buy), the more weight you’ll have in community polls. This is exactly like token governance except you can’t buy your points and pass malicious proposals that favour you (such as the Mango Market hack).
Special Membership
Community Points can be used to purchase a Special Membership in the subreddit. Special Memberships come with several features such as loyalty Badges, animated emojis and GIFs.
Are there any risks to this Thesis?
There are several actually and so far I’ve only talked about verticals that Reddit can push forward while everything goes perfectly. For starters, we need to realise that a native Marketplace isn’t ready and out of the 3m wallets that hold a “Reddit NFT”, only 86,000 NFTs of them are paid ones. So we need to discount millions of wallets as non-paying customers. Then from that potential pool of 86k unique wallets, there are only about 2-3k wallets that are actually doing on-chain transactions. There’s potential that these NFTs remain in a siloed environment, separated from the broad crypto ecosystem.
Breaking it down in percentages, there are less than 1% of 430m users that have a Polygon Wallet with 3 million wallets that we know publicly (known or unknown to them). Then from that, recent data suggest that there are roughly 2-4k wallets that have any level of on-chain activity (which is what has caused all this trading volume). That again is more or less 1% of the Polygon wallets.
Putting it simply again, the amount of Reddit users that are trading Reddit NFTs in relation to the active monthly users the platform has is 0.0001%.
It’s entirely possible that with the launch of the Reddit Marketplace, we’ll see supply skyrocket and a lot of the prices of these NFTs plummet. One of my friends who works in Traditional Finance/Real Estate made an extremely professional chart that sums up a very possible route for these NFTs.
We don’t truly know where the ‘mania’ of these NFTS will stop, or how high it will run in the short term. What this thesis is trying to establish is that over a long period, Reddit NFTs are a “pure play”. It’s not about how much these NFTs are worth to Reddit, it’s about how much they’re worth to others users.
That’s the crux of this Thesis. On a longer timescale, more users will be converted from non-digital avatar holders to digital avatar holders, making the existing older collections more desirable once they’re integrated into the ecosystem. This level of direct or indirect onboarding has never been seen before, and I doubt we’ll see anything close to this for a long while too.
What does this mean for you?
Just like the legendary video made by Davinci Jeremie where he told people to “buy Bitcoin for $1 and lock them up”, this is me telling you to have some level of exposure to Reddit NFTs. While you may not be able to have a full collection (hell even I don’t, I got outpriced), or even be able to buy the “BlueChip” like Rojoms/Foustlings, buy whatever you can afford as a hedge for the future. Again, like any investment, this can certainly fail in a spectacular way that will wipe out everyone, but it can also go up (as is the hope). The risk/reward (IMO) is monumental.
The best bet will always be the Generation 1 NFTs. While a 1k supply may sound like a lot, the total addressable market of Reddit NFTs, if successful, is unparalleled. There won’t be enough for everyone to have one, making them more valuable. The “best” scenario is buying some NFTs and forgetting about them for a couple of years. You can still get quite a few Generation 1 NFTs for less than $100 and numerous Generation 2 for that price point.
What do I get out of this?
Nothing much. I had a thesis, I put my money where my mouth was and I typed it out in full detail for everyone to read and make better-informed decisions. This bet seems to be working out in the short term, but validation only comes over the long term. There are still many unknowns, which we can only speculate on and hope for the best.
Of course, I want this to go right, but the purpose of this thesis was to provide a framework as to how I’m personally approaching this project over a longer time horizon. You may agree with some parts of it, or you may disagree with all of it, but as is the nature of Page One, this information is now public for anyone to access and use for free in their own research.
What’s my end goal for these? As laid out in my first tweet; go big or go home.
Thanks to @tervoooo & @_tolks for the thoughts, feedback & editing and thanks to each & every one of you for reading and sharing. You can reach out to me on Twitter @NinjaBoffin and be sure to subscribe to Page One!
I'll just say thank you Boffin. 👏👏👏
This is an excellent article to understand "What is behind that" , and reading from a OG side felt cool. Waiting the new storiess LFG