Reddit NFTs Are The Future of NFT UX
Mobile, social, non-custodial options, mainstream UX
Hi 👋 welcome to Brian’s Bulletin. I write essays about blockchains, cryptocurrencies, and NFTs to figure out what’s happening and where it’s going next.
Reddit built an NFT product experience that I think we'll see a lot more of in the near future. You can buy on the mobile app with Apple Pay, you can onboard with zero knowledge of web3, there's a clear value proposition to own the asset, and you can take the NFT off Reddit to use on third-party applications.
And they're doing well: The product, called Collectible Avatars, just launched the Generation 3 sale a couple weeks ago, with many of the NFTs sold out. Dune Analytics shows their total collection volume at 7.8 million owners and 11 million NFTs minted. Although data is often ambiguous in this industry, the magnitude of these numbers means its possibly the most widely-distributed NFT project.
There is much to learn from how they’ve built the product to attract both mainstream and degens. I’ll unpack it here.
The plan is:
Reddit Avatars background
NFT value proposition
The business model
Tech and Product decisions
Prediction for what comes next
Let’s do it.
Reddit is a top 10 social media site with 57 million daily active users. Like most similar sites, its users display profile pictures to represent their identity and status. For years, they could purchase a Reddit Premium subscription to unlock exclusive image styles like above and boost their status with badges.
Over the past year, they built a new business line selling limited-edition avatar artwork NFTs that users can display as their profile pictures. This new business appears to be the way of the future as they've committed prime real estate in their app to it—this shop is the first page displayed when you click to style your avatar.
NFT Value Proposition
So why buy this? First and foremost, it can be displayed as your Reddit profile picture which helps you "stand out in the comments" as they say on their explainer. It helps users win at a game they're already playing. It's about status and identity—flexing your limited-edition avatar; getting noticed; being part of the trend; being an early adopter; collecting artwork you like. It sounds simple, but they built something people want.
Furthermore, when you purchase, you claim the rights to "use, copy, and display the avatar art for your own personal use, and you can transfer these rights to others by selling or transferring your Collectible Avatar to another individual." This gives owners the sense of true ownership beyond the walls of Reddit properties.
Sustainable Business Model
For Gen 3 which just launched, Reddit partnered with 100 artists who designed the avatars. Reddit took a 20% split on primary sales and half of the 5% royalty fee on secondary sales. This is a model that can scale to the millions of Reddit users and generate income for the platform.
Technical and Product Decisions
The crypto wallet design is what I find most interesting. They designed a user experience that requires no knowledge of web3 to participate, while allowing advanced users all the options they may desire.
Here’s how it works:
User requests to create an NFT Vault on Reddit mobile app
Mobile device receives: Public address, Private key, and Recovery phrase
Note: Reddit does not have access to the Private key and Recovery phrase
User chooses an option for how to back up the Vault (image below)
Backup to Reddit stores the encrypted private key on Reddit servers secured by a user’s password
Cloud backup stores the recovery phrase on a cloud (e.g. iCloud)
Recovery phrase backup is the user manually storing the phrase how they like
How to Transfer NFT from mobile device
Mobile device signs transaction with private key
Reddit submits the transaction to blockchain
Reddit pays gas for first transaction (for a limited time)
How to Transfer from NFT from web
User must have backup encrypted private key stored with Reddit
User inputs Vault password to decrypt the private key
Transaction signed with decrypted private key
Reddit sends transaction to blockchain
In this setup, Reddit cannot access the account without the user's decryption password, and the user can choose to transfer the assets to their own crypto wallet, or import their vault to a third-party crypto wallet with the recovery phrase. Thus, novice users can easily join with a few button-clicks, and advanced users can take advantage of web3 ownership and interoperability.
The technical design of the NFTs also satisfies the expectations of web3 die-hards. They chose to build on public blockchains with image data stored using IPFS, which is a protocol used to publish data in a decentralized fashion. IPFS is a “network that reduces data silos from centralized servers, making [it] more resilient than traditional systems,” and it’s the same method used by Bored Apes. They expose the links to blockchain explorers and IPFS to prove the asset's existence. This is table stakes to appeal to the degens.
And critically important, because of this design, they're able to offer payments through Apple Pay. I was able to make a purchase quick and easy.
Prediction for What Comes Next
While continuing to offer Collectible Avatars, I think they will evolve this NFT project into a community building platform for subreddits.
They’re already building the infrastructure to create and distribute NFTs that interact with the Reddit app. The next step would be to allow their communities to create their own.
Reddit distinguishes itself from other social media because of its focus on community building through subreddits. Subreddits are forums focused on a theme or topic, with moderators and rules. There are over 100,000 active communities. One of the most popular you’ve likely heard of is WallStreetBets, which has 13.9 million members.
Imagine the power of WallStreetBets issuing its own NFTs which can be displayed as the profile picture and signal of group identity. From there, they could offer token-gated content to members of the subreddit. This gives the moderators a way to monetize their community, and Reddit would get a split.
Reddit understands community better than most, so I’ll be watching how they integrate NFTs into their flow, or not. There will be more to learn.
But one thing seems obvious: the future NFT UX will embrace more mobile, non-custodial options, social, and mainstream UX.