What Reddit’s ‘Digital Collectibles’ Mean For The NFT Space

By akohad Oct25,2022


It’s happening now

Reddit NFTs are all over Twitter. I won’t bore you with the details as I’ve seen tens of Tweets summarising what they are. Also, it’s Diwali in India and I need to go out and celebrate it with my friends. So, I’m trying to write this as quickly as possible! Here is a screenshot which lays out the details succinctly.

I know their hype will die down in a few days and we won’t be discussing them as much. Thus, I am more concerned with what they mean for the current state of the NFT market and its future. These are my initial thoughts:

Collectible Avatars instead of NFTs

This is huge. They intentionally left out the term NFTs from all marketing material on this drop. I can think of various reasons why they did it. When someone asks me what are NFTs, I say they are non-fungible tokens. Then, I have to explain what is non-fungible and then what a token is. This is not smooth. If every time we have to get into a technical discussion while explaining a new product, then it loses its shareability. For this reason alone, I don’t think the term NFT will survive in a few years. It just is too technical for the normies.

On top of that, NFTs have horrible PR. We can’t really blame anyone else for it. Many of us got lucky in 2021 and bought the right animal photo, which made us a lot of money. We then proceeded to call everyone else stupid and started flexing the money we made from NFTs. There is nothing people hate more than arrogant rich assholes! No big brand wants to be associated with this kind of PR. Hence, digital collectibles instead of calling them NFTs.

This is bad news for me personally because my username is ‘NFT Fruit’. If anyone has suggestions for a name that doesn’t include ‘NFT’ in it, I’m all ears.

Polygon Network instead of ETH

I tweeted this a few days ago. I think Reddit’s choice of Polygon is just the trailer of what’s to follow. ETH transaction fees are too high for a major brand to come into the space. They can’t expect their users to pay $5-$20 every time to transfer an NFT. We will see multiple big-brand drops on Polygon in the next 12 months. I’m considering buying their coin $matic for this very reason. It’s usually a good idea to bet on the infrastructure instead of betting on individual projects built on that infrastructure. Much less time-consuming. (NFA obviously)

Mass adoption is nearer than we think

I had estimated tens of millions of users flowing into the space in 3–4 years. I am revising that estimate to 12–18 months. Brace yourself for what’s to come because none of us is prepared for it. New technologies don’t grow linearly but exponentially and no matter how intuitive we are, we can never fully comprehend exponential growth in our minds. None of us has any clue what the space will look like with 50 million active users. React quickly and don’t hold on to preconceived notions. I have seen many people lose because of their reluctance to adjust to the dynamism in the market. Don’t be a purist! Purists get left behind while the adaptable survive.

USD and not crypto

Speaking of purists, don’t be one of those people who start complaining that these are not real NFTs because they’re bought using fiat instead of crypto. No one cares about your preference. The world will always choose convenience over purity. We’ll see all major NFT drops in USD and not crypto until we solve the wallet problem. It is just too cumbersome a process to set up a Metamask account and convert fiat into crypto just to buy a $50 digital collectible.

Low cost

This is pretty straightforward. If we want millions of people to come into the space, then NFTs need to be priced below $100 and not $10,000. I wrote an article a few days back regarding Taylor Swift’s NFTs and suggested that she should have her collection priced between $50-$100 if she wants to onboard most of her loyal fans.

Non-speculative assets

This is the most important thing to understand if we want to be prepared for what’s coming. 99% of the NFTs in a few years won’t be speculative assets. They will have inherent value and won’t derive their value solely from your ability to sell them at a higher price. How do I know this? Because 99% of the world doesn’t actively trade stocks. We can’t expect them to change their behaviour and start speculating in an even more volatile market. They will buy NFTs for their own sake and not for the sake of speculating on them.

I have plenty of other thoughts regarding this but I won’t oversupply the market with them for now. Maybe a series 2!

‘Digital collectible’ Fruit

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