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 first 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 increased after Bhat revealed that the data, with more than 28,000 transactions, generated $8.2 million. Still, with peak sales of just more than $40,000, they are far behind top avatars like Bored Ape Yacht Club and CryptoPunks, who routinely sell for hundreds of thousands and sometimes millions of dollars even during the crypto winter.
However, Reddit’s involvement could have a big impact on the NFT market, which big brands have been pouring into recently as the metaverse/Web3 frenzy went mainstream.
First, there are many potential new buyers. The r/cryptocurrency subreddit 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. It requires high coin costs — $50 to $75 is considered average — and high transaction fees. As in the broader payments market, several of the major Ethereum competitor blockchains have attempted to attract this market. Solana led, but with Reddit’s avatars emblazoned on Polygon, the project got a very big boost.
For a third, it flies in the face of the argument that NFTs – which have seen prices and trading volumes collapse during the crypto winter – are not a blip in the crypto pan.
Apple’s big disc
The NFT market was dealt a major blow on Monday (October 24), when Apple announced that NFT sales would be allowed on iPhone apps and all in-app purchases would have to go through the payment service, generating a 30% fee.
Many in the market believe it will discourage NFT marketplaces from selling via iOS apps – like top marketplace OpenSea, which has an App Store app that only allows browsing.
This cut in sales has led to several major lawsuits and regulatory action in the US and EU – most recently in September, when a federal judge ordered Apple to allow app developers to use other payment rails, but that is likely to be appealed.
Tim SweeneyCEO of Epic Games, who sued Apple for being a monopoly (and lost on that part), chimed in on Twitter, saying: “Now Apple is killing all NFT app companies they can’t tax, crushing another new technology that can compete with its grotesquely overpriced in-app payment service. Apple must be stopped.”
Now Apple is killing all NFT app businesses they can’t tax, squashing another new technology that could compete with the grotesquely overpriced in-app payment service. Apple must be stopped.
— Tim Sweeney (@TimSweeneyEpic) 23 September 2022
EU NFT reconsider?
The EU’s mostly complete Markets in Crypto Access (MiCA) bill that created a broad cryptoregulatory 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 which also focuses on decentralized finance (DeFi) and the metaverse.
But Peter Kerstens, head of the European Commission’s financial technology working group, said in a speech on Wednesday (26 October) that the EP is working on a resolution calling for NFT regulation from the commission which could regulate NFTs separately.
“Parliament is working on a resolution on NFTs,” Kerstens said, per CoinDesk. “If there is a strong political indication or desire for an initiative, it can prompt the commission to present it. If we don’t act on it, we’ll have a lot of explaining to do and I think we’ll end up with an unhappy Parliament. We don’t like an unhappy parliament.”
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