Things have been slow for a while with NFTs. Personally I have been suffering from withdrawals, a punter just craving some action. Every day I log onto NFT twitter, and scroll endlessly through hypothetical digital tumbleweed.
Ok maybe that is a little over the top. There have been some projects that have dropped in the last few months, the most recent drop being Renga. Renga was spoken about as a blue chip project when it dropped and to be honest, I believe it may be still. However, Renga rose to around a 3ETH floor price, and came back down again. The reason for this? Lack of liquidity in the market. There is simply an absence of a flow of ETH entering the project (all projects). This flow of ETH is what drives the floor price up, and sustains the price at a certain level. This is becoming clearer to me as the bear market moves on and we see more and more examples. Boki also falls into this category.
I will write about these projects in depth somewhere else (when/if I get a chance to). For now my mind is focussed on the extremely interesting digital collectible drop from Reddit. I say digital collectible here intentionally, as these NFTs have been marketed as digital collectibles to the Reddit fanbase. As readers may or may not know, NFTs have come with a fair amount of stigma attached to them, and there are communities out there (such as gamers), that will buy any sort of a collectible available to them except for an NFT.
Before I continue I need to preface this with a little bit of honesty. The whole reddit avatar thing is complicated, and I am getting lazier and lazier when it comes to research. You can read about how it all works here. My understanding of the situation is that some collections of roughly 1.5k items were put together by artists as part of the reddit collection. How these artists were chosen I do not know. There were further avatars dropped to reddit users and I believe some of these were customisable. Again, please forgive my ignorance but the whole thing is quite complicated.
Using a separate tool, redditfloor.com, it is possible to keep track of what is going on with these tricksy snoos. This site displays the floor prices for particular avatars. What is particularly confusing about this is that most collections are 1.5k as I said, but are made up of three separate avatars, mostly with one common, one mid tier and one rare. This whole system took me longer to figure out than I care to explain, but digging through the collections on Opensea is fun if you are a nerd like me. I also believe the slight difficulty may keep prices down for a little while on certain more obscure items.
One final piece of confusion and complication (for me at least), is that redditfloor.com states there are 86k+ avatars on the market, but “the singularity” collection says there are 1.2M items in it. This confuses me, I do not claim to understand what is going on here, maybe someone smarter than me does know.
As confused as I am there are some fundamentals that I fully understand about these “digital collectibles”, and I believe that these are the important details. For starters, over 3 million NFT wallets were created as a result of this reddit NFT drop. Reddit now has more NFT users than Opensea. This means more eyeballs on the crypto space, and I believe that this will be a slow burn, showing it’s true effect when the next bull cycle starts up. Personally I think that redditors will be introduced to NFTs now, and will be sucked in when the market cycle starts to improve.
Further to this, reddit NFTs are a watershed moment, as they are the first example of an NFT drop made by a web2 company. This is an amazing precedent, and it paves the way for other web2 companies to follow on. There have been predictions on the NFT community of similar drops being possible from the likes of Twitter, Facebook, Google, Youtube, Amazon etc. and I think that this is very exciting.
What is exciting about the possibility of such drops, is not just that users will be given digital collectibles, but that these digital collectibles will be malleable and customisable. Depending on the particular implementation in web2, a digital collectible can track what a user has done on a platform and display it, displaying achievements for numbers of likes on tweets, or video views, or reddit karma, and on and on. The use cases are endless, and will be implemented by people far smarter than myself. This means that being early on these drops can make a collector very well positioned for the adoption of this technology. Over time, people see that their friends have these avatars on their their social platforms, and then they want one too.
Getting back to reddit avatars specifically, there are many use cases slated for these NFTs, and it is rumoured that more and more perks will be coming on board as time moves on. There are umpteen different ways that these avatars can be used to unlock perks, receive airdrops, and obviously to sell on a higher price (as a speculative investment).
