Author | Huohuo Produced | Vernacular Blockchain (ID: hellobtc)
According to the latest data from Dune Analytics, the total sales volume of the Reddit Collectible Avatar series of NFTs issued by Reddit on the Polygon network has exceeded 90,000, reaching 94,338 on December 7, with the total transaction volume exceeding US$11 million. In addition, the current total number of Reddit Avatar NFT holding addresses is 4,079,425, the number of single NFT holding addresses is 3,794,908, and the total number of Reddit Collectible Avatars is 4,811,062, reaching the first place on the daily list many times. As cryptocurrency markets plummet, NFT trading volumes and crypto wallet activity are also declining across the board. Despite this, more people have owned NFTs on Reddit in the past 4 months than OpenSea has in the past 5 years. How did Reddit accumulate such a large NFT user market in just four months? What is the origin of this platform? Today Vernacular Blockchain takes everyone to take a look at the development history of Reddit.
01 Reddit community: American version of Tieba
Although not as globally famous as Facebook, Twitter, Instagram and other websites, Reddit, as one of the top five most popular social networking sites in the United States, has its own unique advantages compared with traditional social networking sites. It currently has more than 1.5 billion registered users and 430 million monthly active users. , and 52 million daily active users. Reddit's Chinese name is Hongdi.com. It is also a comprehensive social news site and a decentralized online community. Whether you like news, sports, games, or cute animals, users can find anything of interest on Reddit's tens of thousands of communities. Differentiated individuals gather together because of common interests, and the organization and sense of belonging of the community are formed. Whether it's celebrity scandals, political elections, or memes, Reddit has always been ahead of the curve. It can be said to be a social media platform, also similar to a forum. It once had many titles, such as the American version of Tieba, the American version of Tianya, the American version of Renren... Here anyone can create and manage their own community. Reddit can even be used as a search engine. For example, when you want to buy a car, you can first search for "BMW 3 Series" or "Mercedes-Benz E-Class" on it, and check relevant information and read reviews. Everyone looks for topics they like in the community, or creates their own content. The community on Reddit is called a subreddit (sub for short). Every user can create a sub, and the creator is the mod (i.e. manager) of the sub. The mod has great authority and can determine the style and rules of a sub. Users (also called redditors) can browse various communities, submit content links or publish original works, support, oppose, comment, and forward posts. The high-quality and interesting content posted by users can obtain post karma and comment karma. ) and even receive Reddit Coins. More popular content is also pushed to the top of the page, while less popular content is buried beneath it. Redditors will learn, read, and discuss many issues in life on this platform. This is also somewhat similar to the current Little Red Book in China. According to Similarweb data, as of now, the Reddit website has 1.7 billion monthly visits, nearly 50% of which come from the United States. However, one thing is different from other social networking sites. The anonymity of Reddit means that there are no KOLs that bring their own traffic. All content is ranked completely according to popularity, and popular content will be pushed to the homepage. Although users can find their own space on Reddit, the anonymity and freedom of Reddit also make it full of negative voices, especially political news.
02 The development history of Reddit: twists and turns
Reddit was actually born in 2005, but when it comes to the history of Reddit, it can be said to be full of twists and turns. It can be called a "history of upright entrepreneurship by passionate young people"! When Baidu Tieba ushered in its seventh homepage redesign in 2005, two young guys, Steve Huffman and Alexis Ohanian, founded Reddit. They were roommates and good friends when they were students at the University of Virginia. Steve is majoring in computer science, and Alexis is studying business and history. They are both passionate young people with dreams and always want to do a career.
Steve (left) and Alexis (right) Picture source network
In 2005, the two of them accidentally entered Y Combinator (YC), a well-known venture capital company at the time, and got an opportunity to incubate first and then think about entrepreneurial content! After entering YC, the leader at the time suggested that they focus on browsers. Then after some exploration, Steve and Alexis felt that the Internet at that time urgently needed a "portal" website based on their own Internet experience. Unlike the domestic "Hao 12345 website", the recommendations on the homepage of this website are the content shared most by users, rather than the links selected by the website administrator. After establishing the entrepreneurial project, YC provided another US$12,000 in starting capital, and Steve and Alexis got started. The first step was to come up with a name for the project, but when they settled on Reddit, it didn’t get the approval of their colleagues. Everyone thought the name was too stupid.
The Reddit logo is a round and cute alien. Picture source network
But there was a reason: at that time, too many Internet domain names were registered, and it was really difficult to apply for a name that was not occupied and was easy to remember! In addition, Reddit also means "read it", so it has some "connotation" anyway. Then I asked Paul, the leader of YC at the time, to post personally to attract traffic. There was some traffic, but it was all negative. Later, because no one took the initiative to post, there was not much traffic. The two of them worked very hard in the early stage anyway. But Reddit was very avant-garde at the time. One of its distinctive features is that it gives users great power, including the introduction of a user message function. Although this is standard for all websites today, at the time, this was not common. You know, in 2005, mobile phone applications were still far away from becoming popular, and even Apple didn’t know where it was! A few years later, users were allowed to create subreddits, which was the first to become popular. Users were united through subreddits on various themes, which gave them a more intimate and belonging feeling with Reddit, and also allowed Reddit to compete with other competitors. Really differentiate. However, empowering users is also a double-edged sword. While it brings ultra-high traffic, it also puts great pressure on supervision. This made Reddit, which had only 4 employees (including the founder) at the time, later suffer from a large number of users sharing pornography. The violent photos attracted a lot of negative comments. At a critical moment when Reddit encountered difficulties in its development, it rained all night, and three of the four employees encountered various changes. Steve, the only one who could take the lead, discussed with Alexis and his mentor Paul and made a decision Decision made: Reddit will eventually go out of business if things continue as they are. "The only thing we can do is sell it before it's too late so Reddit can survive and everyone can make some money."
The initial four employees, from left to right: Aaron, Steve, Chris and Alexis Source Network
So, on Halloween 2006, Reddit, which had been founded for 16 months, was officially acquired by the Condé Nast Publications group. The acquisition price was low (less than $20 million), but the young people who suddenly became millionaires were very happy, and the two founders were only 22 years old. But later in the story, the friendship between the two people, who had lived, ate, and struggled together for many years, broke down and they became just strangers. It is said that the conflicts between Steve and Alexis began to accumulate during the Reddit acquisition negotiations. After that, the two gradually drifted apart and gradually stopped talking to each other. After losing its founder, Reddit's voice was reduced, and troubles came one after another. In 2011, a discussion about "child pornography" erupted on Reddit, followed by a "community moderation controversy." Should Reddit regulate illegal content posted by users? There are ongoing disputes within the company. Since then, Reddit has finally strengthened its management of illegal content, such as introducing a policy that prohibits "content that encourages, glorifies, incites, or calls for violence and physical harm to a person or group." Secondly, as Reddit's staff and expenses increase, the question of "how it can make money" becomes more and more prominent. As a community website, Reddit has no other way to make money other than advertising. However, for various reasons, such as the inability to design an accurate ad targeting system like Facebook because users prefer anonymity, and the negative reviews caused by sharing illegal content, advertisers have little interest in Reddit. Therefore, Reddit's advertising revenue has not increased rapidly, and the revenue from other channels is also a drop in the bucket. In 2014, Reddit CEO Huang Yishan resigned due to a disagreement with the board of directors. During this time of internal and external troubles and turmoil, founder Alexis returned as executive chairman after nine years away. He has done many things, but his heart has always been Reddit and he has stayed in touch with people at the company. His return was welcomed by everyone in the company and quickly united people. At the same time, Alexis took the initiative to contact Steve Hoffman, hoping that he could return and fight alongside her again. The two of them also laughed away their grudges. In July 2015, Steve returned to Reddit as CEO. “Someone asked me: Why did you run back into a burning building?But I have no choice because I really, really love Reddit. "After returning, the two did three things that impressed the outside world:
First, a new round of financing of US$200 million was completed in August 2015.
Secondly, Android and iOS versions of the Reddit app have been released, and more than half of Reddit users have chosen to log in from mobile. This entrepreneurial project based on the browser has finally kept up with the pace of the mobile Internet.
Finally, the advertising system will be comprehensively improved and optimized. For example, the self-service ad buying tool just updated this month can generate brand advertising revenue reports. The media claims: Reddit is ready to welcome advertisers.
Then Reddit's development turned the corner.
In the following years, Reddit has developed rapidly and steadily. As of October 2020, its monthly visits exceeded 18 billion, monthly active users exceeded 430 million, and the average daily number of users was 52 million (as of October 2020 In October), daily activity data increased by 44% compared with the same period in 2019. While striving to maintain a community atmosphere, Reddit also continued to attract new users, eventually growing into a behemoth that even leading social software such as Twitter dare not look down upon.
03 Reddit and encryption
According to one article, at the end of 2021, the word "crypto" had been used more than 6.6 million times on Reddit, with "cryptocurrency" beating out other topics to become the most popular topic. In fact, looking back at history, Reddit has been in contact with cryptocurrencies for a long time. In February 2013, Reddit announced that its paid service would accept Bitcoin payments and entered into a partnership with Coinbase. In 2014, Reddit plans to launch its own cryptocurrency, "Reddit Notes." In 2015, Reddit stopped Bitcoin payments, stating that Coinbase changes and some Bitcoin payment loopholes affected the purchases of some users, leading to the removal of this option. There was no major movement from 2016 to 2017. By 2018, Reddit co-founder Alexis said cryptocurrencies were a tool to prevent hyperinflation. At the end of 2019, Reddit first launched community points based on Ethereum, and later chose to use Arbitrum, a second-layer scaling solution, to expand community points. In 2020, Reddit announced that two Tokens issued based on Ethereum: Moons and Bricks will be put into Beta testing. These two Tokens will be issued to members of the /r/Cryptocurrency and /r/FortniteBR sections respectively. It is reported that the two sections currently have 1 million and 1.3 million subscribers respectively. Launching “CryptoSnoos” in June 2021, based on the platform’s iconic Snoo logo, only four will be sold and each will be unique, priced between 70 and 175 ETH. At the end of 2021, Reddit will take another step closer to "Tokenization" and Web3.0, and will cater to the encryption community with a new decentralized and community-oriented look. Reddit’s crypto team said the first thing to do is convert Karma points into tokens. (Karma is the points users earn when their posts and comments on Reddit are liked by members.)
Picture source network
Currently, Reddit has tested 2 community points on the Ethereum Rinkeby testnet and the Arbitrum network, which have a total of 80,000 users (sr/cryptocurrency and r/FortNiteBR). At the end of December of the same period, according to Reuters, Reddit stated that it had secretly submitted an IPO application to the U.S. Securities and Exchange Commission (SEC) and would allow subreddits (subsections) to request the creation of their own tokens. In July this year, Reddit announced a new project: collectible avatars. This time, it is partnering with Polygon to launch a new NFT character market, providing a platform for users to purchase NFT profile images. Designed by independent artists in collaboration with the company (in addition to well-known Reddit community creators), these limited-edition images will provide their owners with exclusive platform privileges. In just 4 months, they have grown rapidly, so there is a recent News: How did the Reddit NFT, which topped the daily list, become so popular?
Picture source network
Everyone knows that the user experience of Web3 is troublesome and has barriers. However, Reddit addresses this well here. How is it done? Here are three steps:
First, Reddit dropped the crypto term NFT to focus on the use case: profile images. To get people onboard with Web3, terms like blockchain infrastructure, crypto wallets, and NFTs need to be simplified. In Web2, no one cares whether you use .pdf, .jpeg, or .png, people only care that they can view, share, and store photos, and Reddit users generally only care about their avatars.
Second, Reddit makes it easy for users to get onboarded into Web3. Reddit created a custodial wallet based on Polygon, but they dropped the term wallet and instead called the wallet a "vault." Reddit started offering free NFTs to their top users. However, they don’t use the term “NFT,” instead calling them “collectible avatars,” images that can be applied to profiles. For Reddit users who understand the value of community points and reputation, this is an alluring status symbol. In order for users to receive avatars, Reddit requires users to set up a Polygon-based wallet account. However, users may not know that they are creating a Polygon wallet. They think they are just opening a "safe" account. They are not taken to a third-party website to perform an action, do not have to write down a mnemonic phrase, or hold a MATIC Token to pay for gas (Reddit helps pay for gas).
Third, Reddit already has a productized community that aligns well with Web3. In Reddit, a user's status is measured by their interactions within the platform and the recognition they receive from other users. However, NFTs introduce another way to represent status symbols on Reddit: scarcity. This is also a common feature of NFT collectibles. Reddit's airdrop of avatars to top users was originally intended to symbolize user engagement, as they would be able to display them on their profiles. Then as the popularity of collection grows, ordinary users also want to own this status symbol. Increased demand for scarce resources increases the monetary and status value of collectibles. Reddit’s community structure aligns well with NFT use cases. The positioning of the avatar NFT strategy will not only not affect the user experience of existing community functions, but will instead bind the platform to the avatar, regularly release new collections, and enable a way to easily display them within the platform, which is a good interaction cycle.
Looking back now, there are three main reasons why Reddit's NFT is popular in the market: 1. Reddit can airdrop an NFT for free to users who meet the conditions; 2. Reddit's NFT has been listed on Opensea, and the floor price is as low as 0.0001. An NFT; 3. The Reddit community has a huge user base, covering various fields such as games, and cryptocurrency and blockchain are only a small part of it. However, since the platform launched NFT in July, more than 3 million users have used its wallet Reddit Vault to purchase and trade NFT incarnations of the Snoo character launched by Reddit, which has also brought a large number of new users to the crypto world. But overall, Reddit NFT holders are relatively small. Even if 4 million Reddit cryptocurrency wallets buy Reddit avatar NFT, it still accounts for less than 8% of daily users. In addition, Reddit has not yet found a sustainable business model, and the price of NFT cannot be guaranteed, which means that Reddit’s profit from NFT sales is also unstable.
04 Summary
Reddit's combination with Web3 by simplifying wallet operations can be regarded as a very successful attempt to embrace Web3, allowing users to easily get started without learning complex Web3 knowledge. There is no doubt that Reddit has taken a successful first step in mass adoption of Web3 and has set an example for other Web2 companies. If you compare this move to Twitter's attempt to get people to use NFTs for images: Twitter users need to use OpenSea, have a MetaMask or other wallet integrated with the platform, have cryptocurrency, have the NFT, have ETH to pay for gas, and finally Go back to Twitter and set the image. By comparing it to Twitter's cumbersome process, Reddit's focus on user experience is a big secret to its success. Would Twitter fare better if it took a similar approach? Welcome to exchange and discuss in the comment area.
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