Reddit Really are the Web2.5 Kings

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Introduction 🔌🔧

We have sent out invites to the biggest Sporting Crypto meet-up so far. It’s next week in NYC and we’ve had over 200 RSVPs so far. I’m really excited to see and meet so many of you in person!

I’ve been OOO since the 1st of April. The last two times I’ve gone away, FTX imploded and LUNA, one of the largest cryptoassets in the ecosystem death spiralled. This time, there seems to be drama between Twitter and Substack, the latter of which are throwing their hat in the social media ring. If their new product ‘Notes’ is good and used by readers, I will definitely use it alongside Twitter and LinkedIn. But yeah, going away for a few days and coming back to see one of your main distribution channels throttling the thing that hosts your content isn’t great!

Reddit Really are the Web2.5 Kings

I’ve written about Reddit a few times before.

Their Reddit Collectable Avatar proposition is the thing outside of sports that I point to the most when consulting or speaking.

That’s mostly because it’s achieved product market fit at scale with an audience that isn’t primarily crypto-native.

What Reddit have done with their Reddit Collectable Avatars is basically Fortnite skins for social, and it’s working brilliantly.

👾 What are Reddit Collectable Avatars

Simply put, they are NFTs that Reddit have allowed their users to buy, own and use to customise their Reddit profiles.

Here’s a Reddit’s Web3 journey so far:

• Introduced off-chain (Web2) avatars in October 2020, that are showcased on your profile. This was a move by Reddit to increase the customisation of their avatar system, to make profiles slightly more unique and vibrant.

• Add a 'premium' avatar feature to Reddit Premium, that allows users to select premium avatar attributes when users choose to customise. Reddit turned the tap on monetisation, testing demand for just how much customisation matters for their users.

• In July 2021, Reddit sold their first few NFTs - which were unique avatars. These sold for between $𝟱𝟰,𝟬𝟬𝟬 - $𝟮𝟮𝟴,𝟬𝟬𝟬 at the time. 

• Reddit then launched their 1st Generation of NFT collectable avatars in July 2022. They functioned in the same way that the off-chain avatars did, but they were ownable and tradeable.

• On October 1st 2022, Reddit launched their Generation 2 NFT collectables…they sold out in 24 hours.

• This coming week, in April 2023, Reddit will launch Generation 3 of their NFT collectables… I would wager they will sell out very quickly. 

The result?

Over 8 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 people have created wallets on Reddit.

More than 94% of those wallets were created for Reddit Collectible Avatars.

7.1 million holders hold over 10.6 million Avatars.

2.1 million of these holders own multiple Avatars.

Creators and Artists have earned over $1m by selling Avatars on Reddit.

Reddit have created an NFT proposition that makes them money, that their users love, and distributes earnings to creators/artists who have a hand in their making.

And this week, Reddit will launch Gen 3 of their collectable avatars, doubling the previous number of curated artists in Gen 2.

I’m sure the launch will be as successful as the previous generations.

🥎 The sports relevance and what we can learn

There is actually direct sporting relevance because one of Reddit Collectables’ biggest partnerships was with the NFL to celebrate the Superbowl.

~1.5 million people minted the NFL Reddit Avatars. Over half a million new wallets were created specifically to mint these NFL Avatars.

Talk about mass activation?

It was free, incredibly easy to do and purely a fan engagement play.

I’m sure it’s not the last time we’ll see Reddit play in the sports realm

But what can we learn from Reddit’s successful Web3 journey? Or rather, their Web2.5 journey?

One of the criticisms levelled at Reddit from crypto purists is that it’s too difficult to make these assets self-sovereign and that most ‘normies’ (crypto speak for people who don’t interact with crypto) won’t know or care about doing so.

But with the crypto landscape in its current state, where security and UI are still far from where they need to be — building in a ‘Web2.5’ approach is super smart.

If we think about the likes of Top Shot, Sorare and Reddit — they all have a couple of things in common:1) You can buy NFTs using a credit card2) You don’t have to have self-sovereignty over your assetsBasically, the successful products in this space that have had mass market appeal have all been Web2 in the front and Web3 in the back. The Web2.5 mullet? 

Reddit are actually creating a marketplace which will make these assets more liquid, more easily transferrable and as a byproduct, will make users understand self-sovereignty on the web that little bit more. So when it comes to the Web3 end of the spectrum, they’re definitely pushing that way.

The Reddit playbook is simple but relies on excellent execution, likeable artwork and terrific conversion. If 7.2m users own a Reddit Collectable Avatar and they have ~45m monthly active users, that ‘freemium’ conversion is absurdly good.

So breakdown that playbook and explain how it can help you if you work in the sports industry:

1. Be simple. Reddit, Sorare and Top Shot. All of these concepts are simple and easy to understand. Next time someone in your sponsorship department suggests you partner with a crazy new play-to-earn metaverse sports game, it’s probably a good idea to shut it down unless the commercials are too good to be true.

2. Don’t be overly commercial. I get it, most of the people involved in the decisions here are looking for a return. But look at what the market is telling you. Manchester United launched their Red Devil Collectables and had almost 1 million free claims. Liverpool tried to drive $10m of revenue from their ~170,000 supply NFT collection and only sold ~9,500 of them. I truly believe that although this can unlock new commercial potential in sports, it will largely be an investment in the same way content and social have been over the last decade.

3. Give back to your community and creator network. Reddit have the distribution and the community but they also have the creators. And clearly, they’re in no shortage of artists who want to work with them.

4. Focus on the fan. Figure out what sports fans actually want in 2023, and then try and join the dots. Too many people I’ve spoken to in the industry are looking across to NFT projects and thinking “We should do that”. Whilst there’s a lot to be learnt from the likes of Reddit, there has to be a focus on your target audience. Reddit looked at their product and decided that profile pictures would liven up the visuals. And Web3 had a great solution in how to make those profile pictures ownable and ‘click’ with users. What is the analogue for your fans? Answer that and go from there.

In a landscape where we’re beginning to see fewer competitors in the NFT licensing market, sports teams and brands will have to look at more innovative ways of engaging fans.

More Sports & Web3 Stories

• Binance and Miami Heat’s Jimmy Butler Hit With $1B Crypto Lawsuit (Link) 

• NFT Companies Renegotiate Marquee Sports Licensing Deals (Link)

• The NY Knicks had a POAP in their latest game, in partnership with Coinbase 

• Lessons on Customer Engagement from Fan Controlled Football (Link)

• P2E (play-to-earn) Cricket game NFT collection, the Meta Cricket League, consisting of 55,000 NFTs that sold out in just 9 minutes (Link)

• Web3 Football Metaverse TOPGOAL Scores Big Investment from DWF Labs to Build Metaverse Sports Experience (Link)

• Manchester City star Ruben Dias is launching Metaverse training sessions (Link)

• Snoop Dogg Sports Blinged-Out Crypto Hardware Wallet at Wrestlemania 39 (Link)

General ‘Stuff’ that Could Impact You

• Pretty incredible chart. Although the total number is probably higher due to retail investment into tokens, this chart is probably the most important when displaying how early it is in the crypto ecosystem.

• Really interesting to see Atletico Madrid attempt to create a ‘creator network’ using their fans. 

• The White House take aim at Crypto in scathing economic report. (Link) — yep, blame it on the magical internet money!

Thank you!

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