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Axie Infinity

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  Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our&nbsp;<a href="https://tokenist.com/terms-of-service/" style="text-decoration:underline;color:#3c7b7b" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">website policy</a>&nbsp;prior to making financial decisions. 
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<p class="has-drop-cap">On Wednesday, Reddit will drop its gen 4 Collectible Avatars. Available in the Collectible Avatars Shop, these customizable and blockchain-based profile pictures (PFPs) mark the evolution of the front page of the internet.</p> 
<p>As the rumor mill on Reddit’s pre-IPO valuation ramps up, how do these tokenized assets fit into Reddit’s long-term outlook?</p> 
<h3 id="nfts-engagement-and-reddit-traffic">NFTs, Engagement, and Reddit Traffic</h3> 
<p>Last week, Mirela Spasova, lead engineer for Reddit’s Collectible Avatars initiative, <a href="https://tokenist.com/reddit-has-onboarded-8m-users-to-its-wallet-and-plans-for-millions-more/" rel="noopener noreferrer nofollow" class="deco-link">outlined Reddit’s Web3 footprint</a>. At the Ethereum Community Conference (EthCC) in Paris, Spasova clarified why they rolled out special assets instead of users just having profile pictures (PFPs).</p> 
<p>In July 2022, Reddit launched a collectible avatar marketplace on Ethereum’s scaling network Polygon to avoid costly gas fees and lower the barrier to entry. The concept is simple. Redditors gain a tradable asset with a supply cap by tokenizing users’ profile pictures (PFPs) into non-fungible tokens (NFTs).</p> 
<p>And when something gains inherent and portable value, it sparks the motivational engine. Axie Infinity first demonstrated this proof-of-concept in the blockchain gaming sphere, as in-game tokenized/tradable creatures triggered a <a href="https://tokenist.com/what-can-axies-6500-revenue-growth-teach-us-about-blockchain-gaming/" rel="noopener noreferrer nofollow" class="deco-link">6,500% revenue growth</a> in less than two years.</p> 
<p>Likewise, Reddit’s rollout of NFTs has been a significant success.&nbsp;</p> 
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<h3 id="reddit-avatars-growth-on-the-back-of-artists">Reddit Avatars Growth on the Back of Artists</h3> 
<p>Spasova noted that over eight million users were added to their Reddit Vault wallet. Not only does the non-custodial, Ethereum-compatible wallet offer actual ownership, but it also can freely resell tokenized PFPs on popular marketplaces like OpenSea.</p> 
<p>Reddit’s Collectible Avatars have been so successful that they outpaced OpenSea’s active NFT wallets by October 2022. So far, there have been three Collectible Avatars rollouts:</p> 
<ul> 
 <li>Creator Collection (August 2022)</li> 
 <li>Series Collection (October 2022)</li> 
 <li>Future Realities Collection (April 2023)</li> 
</ul> 
<p>They have been designed by independent artists hailing from their subreddits. <a aria-label=" (opens in a new tab)" href="https://dune.com/queries/1428579/2423370" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">17 million</a> Polygon-hosted Collectible Avatars have been launched across 14 million unique holders.</p> 
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 <figure class="aligncenter size-large is-resized"> 
  <img decoding="async" src="https://tokenist.com/wp-content/uploads/2023/07/Screenshot-2023-07-25-181649-1024x478.png" alt="" class="wp-image-163591" width="840" height="392" srcset="https://tokenist.com/wp-content/uploads/2023/07/Screenshot-2023-07-25-181649-1024x478.png 1024w, https://tokenist.com/wp-content/uploads/2023/07/Screenshot-2023-07-25-181649-300x140.png 300w, https://tokenist.com/wp-content/uploads/2023/07/Screenshot-2023-07-25-181649-768x358.png 768w, https://tokenist.com/wp-content/uploads/2023/07/Screenshot-2023-07-25-181649-650x303.png 650w, https://tokenist.com/wp-content/uploads/2023/07/Screenshot-2023-07-25-181649.png 1189w" sizes="(max-width: 840px) 100vw, 840px"> 
  <figcaption class="wp-element-caption"> <em>Throughout the three generations rollout, the Collectible Avatars growth trend is quite clear. Image courtesy of Dune analytics via @PolygonLabs&nbsp;</em> 
  </figcaption> 
 </figure> 
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<p>In secondary sales, Reddit’s Collectible Avatars accounted for <a aria-label=" (opens in a new tab)" href="https://dune.com/queries/1986257/3284468" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">$32.6 million</a>, cumulatively across 306,253 total sales. The <a aria-label=" (opens in a new tab)" href="https://opensea.io/assets/matic/0x8d0501d85becda92b89e56177ddfcea5fc1f0af2/0" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">highest-priced Collectible Avatar</a> sold for $49.6k as a part of The Senses collection.</p> 
<p>In the grand scheme of tokenization adoption, where does that lead to?</p> 
<h3 id="stagnating-engagement-and-lower-nft-sales-highs">Stagnating Engagement and Lower NFT Sales Highs</h3> 
<p>In 2020, Reddit had 52 million daily active users (DAU), a 44% uptick from the previous year. Nearly half of the Redditors are from the United States, followed by the UK and Canada, clearly centered in the Anglosphere.&nbsp;</p> 
<p>In 2022, Reddit reported <a aria-label=" (opens in a new tab)" href="https://www.statista.com/statistics/1324264/reddit-daily-active-users/" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">57 million DAUs</a>. This is important to notice because the two-year period diminished social activity in the physical world post-lockdowns. In turn, one would expect a significantly higher user activity than pre-2020 growth.&nbsp;</p> 
<p>This stagnation is evident from the estimated 55.79 million DAU for 2023. Combined with Reddit’s Anglo-centered demographics, this suggests an engagement ceiling is approaching.</p> 
<p>At present, there are <a aria-label=" (opens in a new tab)" href="https://dune.com/queries/1428687/2423548" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">11.4 million</a> single Collectible Avatars holders. However, despite the growth in Reddit Vault wallets, Collectible Avatars sales have been on a <a href="https://dune.com/queries/2354897/3856783" target="_blank" aria-label=" (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">steep downward trajectory</a>, interrupted by new rollouts.&nbsp;</p> 
<p>In turn, tomorrow’s Gen4 Collectible Avatars deployment is likely to be met with less excitement than the previous three, tapping into limited engagement supply with more tokenized avatars reaching lower price floors.</p> 
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<p><strong><em>If every Redditor gets a tokenized PFP representing them, will that standardization increase engagement or flatten it? Let us know in the comments below.</em></strong></p> 
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/retrospective-on-reddits-collectibles-as-gen-4-drops/">Retrospective on Reddit’s Collectibles as Gen 4 Drops</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Retrospective on Reddit’s Collectibles as Gen 4 Drops

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