Reddit’s Snoo Mascot Avatars Bring Millions to NFTs

Reddit has become the newest 800-pound gorilla in the non-fungible token (NFT) world.

Chief Product Officer Pali Bhat said at a conference last week that the initial three collections of profile picture (PFP) avatars it launched in July have convinced 3 million of the social media platform’s members to create Reddit Vault digital wallets, Decrypt reported.

The NFTs are based on Reddit’s Snoo mascot, and their value spiked after Bhat revealed that data, with more than 28,000 transactions, generating $8.2 million. Still, with the top sale just more than $40,000, they are far behind the top avatars like Bored Ape Yacht Club and CryptoPunks, which routinely sell for hundreds of thousands and occasionally millions of dollars even during the crypto winter.

However, Reddit’s involvement may have a big impact on the NFT market, which major brands flooded into recently as the metaverse/Web3 frenzy went mainstream.

For one thing, there are a lot of potential new buyers. The subreddit r/cryptocurrency claims 5.6 million subscribers, while r/bitcoin has 4.7 million. Although r/NFT has 544,000 subscribers, many will not be new to the NFT market.

For another, it could help break the stranglehold the Ethereum blockchain has on NFTs. That requires high minting costs — $50 to $75 is considered average — and high transaction fees. As in the broader payments market, several of the biggest Ethereum competitor blockchains have been trying to attract this market. Solana was leading, but with Reddit’s avatars minted on Polygon, that project just got a very big boost.

For a third, it flies in the face of the argument that NFTs — which have seen prices and trade volume collapse during the crypto winter — are not a flash in the crypto pan.

Apple’s Big Slice

The NFT market suffered a big blow Monday (Oct. 24), when Apple announced that NFT sales would be allowed on iPhone apps and any in-app purchases would have to go through its payment service, generating a 30% fee.

Many in the market think that will discourage NFT marketplaces from selling via iOS apps — like top marketplace OpenSea, which has an App Store app that only allows browsing.

That cut of sales has led to several major lawsuits and regulatory moves in the United States and European Union — most recently in September, when a federal judge ordered Apple to allow app developers to use other payments rails, but that is likely to be appealed.

Tim Sweeney, CEO of Epic Games, which sued Apple for being a monopoly (and lost on that part) chimed in on Twitter, saying: “Now Apple is killing all NFT app businesses it can’t tax, crushing another nascent technology that could rival its grotesquely overpriced in-app payment service. Apple must be stopped.”

Now Apple is killing all NFT app businesses it can’t tax, crushing another nascent technology that could rival its grotesquely overpriced in-app payment service. Apple must be stopped. https://t.co/4KChp6jtFZ

— Tim Sweeney (@TimSweeneyEpic) September 23, 2022

EU NFT Rethink?

The EU’s mostly complete Markets in Crypto Access (MiCA) bill creating a broad crypto regulatory framework largely avoided NFTs, leaving them for another day — although the European Parliament is looking at adding them to other bills, including a money laundering bill that also focuses on decentralized finance (DeFi) and the metaverse.

But Peter Kerstens, head of the European Commission’s financial technology task force, said in a Wednesday (Oct. 26) speech that the EP is working on a resolution calling for NFT regulation by the commission that might regulate NFTs separately.

“The parliament is working on a resolution on NFTs,” Kerstens said, per CoinDesk. “If there is a strong political indication or wish for an initiative, that may move the commission into presenting it. If we don’t act on it, we’ll have a lot of explaining to do, and I think we’ll end up having an unhappy parliament. We don’t like an unhappy parliament.”

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