30 reasons for why I'm bullish on reddit NFTs - the ultimate hopium list

Two weeks ago a friend of mine asked why I'm so bullish on reddit NFTs. I came up with a bunch of reasons and several redditors requested I translate them into English and post them so yesterday I finally found some free time to get down to it.

Disclaimer: I'm open to criticism and I'm very curious what you think. I'm new to NFT trading, but I've been trading crypto on and off since 2017 and recently I started working professionally as a market maker. I'm no expert by any means. Some of these might be redundant, I'll try to update it the list with what happened during the past two weeks. English is not my first language, so excuse my phrasing which might be weird at times. Let's dive right into it:

1. Reddit has airdropped free NFTs to millions of users at this point. They're managed to grab the interested not only of the people who claimed them, but also strangers who see their avatars and wonder what the fuss is about. It's safe to say that every active subreddit has been 'infected' at this point. Giving a free fix is a great marketing strategy, as we don't initially realise we're being marketed. Especially when they learn that free avatars can be sold anytime and there's liquidity for that.

2. The fact that NFTs are being airdropped gradually makes people impatient about getting their own, which in turn creates anticipation or even FOMO, especially in crypto communities. Some people will grow impatient and go out to buy the paid ones

3. The fact that every n-th active redditor owns an (free or paid) NFT now makes it harder to ostracise their owners. It's easier to hate on the minority, and vice versa, harder to exclude members of your own community simply because of their avatars (there is certain tribalism to reddit communities, especially in smaller, radical, political or activitist subreddits). Unfortunately redditors are still being discriminated but it's becoming harder and more and more people stand up against such exclusion, which in my personal opinion is fucking outrageous and should not be tolerared.

4. Exposure effect. The more users with NFTs you see, the more likely you'll be to develop a liking to them, or at least stop disliking them.

5. Association bias. When you see a post or comment you totally agree with, and the autor owns an NFT, you'll be more likely to like them too, over time. This unfortunately also works in the other direction, but I'm assuming most people spend the majority of time on subreddits where they enjoy the content. You might think I'm reaching here, but psychological biases or heuristics are some really powerful tools that marketers are well aware of and take advantage of in everyday life. So go ahead and create awesome content anywhere on reddit!

6. Contrast effect - the enhancement of perception of an object as a result of simultaneous or subsequent (within short timeframe) exposure to it. Just like an average-looking person will look more attractive among their unattractive peers, reddit NFTs stand out from basic avatars, especially the default uncustomised ones, which makes them look fancier than they would look in isolation. This happens all the time in the comments.

7. Sunk cost fallacy - I wouldn't expect the price of reddit avatars on Opensea to fall below store price anyway, but the fact that redditors pay a fixed amount to own it makes them less likely to get rid of it at a lower price. It's an additional safety net which most likely won't be needed as yet we haven't seen many whales hoarding avatars at store prices (those would be more willing to take the loss than your average redditor who owns one copy and actively wears the avatar). It also applies in time being spent on reddit - NFT owners will be less likely to limit their time spent using this site or delete their account after going through the trouble of selling (might not be applicable if reddit introduces their own marketplace), so watch out if you end up wasting your time here due to your cool avatar :D

8. Endowment effect - there's an assymetry in people's willing to buy an object and their willingness to get rid of it.

In a valuation paradigm, people's maximum willingness to pay (WTP) to acquire an object is typically lower than the least amount they are willing to accept (WTA) to give up that same object when they own it—even when there is no cause for attachment, or even if the item was only obtained minutes ago

People who own an object tend to value it higher than those who don't. It encourages holding, and you might ask why it applies to NFTs and not to other crypto. Reddit NFTs are usable objects, even if digital, which is not the case with cryptos or other financial assets, which, first of all are divisible (you can sell a part of your profit and keep the rest) and second, often treated merely as investments which aren't being used on a daily basis.

1. Recognisability. Once you've been using your own, unique avatar for a while you're being recognised in your communities for easily, you're basically building a brand, just like social media influencers are building their own brand. NFT ownership facilitates this phenomenon, which is well visible in this sub, where we often recognise each other not by nicknames, but by avatars. Or both. This might lead new people to create their own distinct avatar, but also keep them from selling it, fearing that they will end up losing their brand. Which leads me to my next point which is:

2. Customisation. There are billions of different traits you can mix into a single avatar, which will make your avatar unique and help you stand out in the comments

3. Other than that, mix and matching is insanely fun and addictive! You can get really creative with your own and seeing others come up with unique ideas will draw more people to participate. You'll either find the one you like most and stick to it (and grow attachment) or become hooked on switching your avatars every second day. Either way it's a win win.

4. Attachment issues is another thing which works along with endowment effect but is somewhat distinct, yet applicable here. Once you hit your perfect combo, you'll want to keep all the traits that it contains

5. On the other hand, people who are into mix and matching might buy certain avatars which don't seem that appealing on their own, but possess certain traits that they would want to own as well (e. g. bubble tea from one of the avatars, no offence to those who like that design)

6. Should have mentioned it somewhere earlier, but both being able to wear your NFT and mix and match them is truly disruptive in an NFT world. This is a huge advancement.

7. No more screenshoting. Reddit made it impossible for anyone to fake the blue hexagon (and integrated blockchain link) so you won't have to worry that somebody will copy your avatar since it can easily be checked if it's real or fake. Those who go out to fake avatars might think they're witty by doing so, but it seems like they're just making fools of themselves.

8. Ethereum merge. Even though these NFTs aren't minted on Ethereum mainnet, your average normie wouldn't dive too deep into details about which chain it's been minted on. The fact that the carbon footprint is so neglibile at this point makes a better impression of NFTs as a whole and it's easier to disprove incredibly simplified and basically false points about NFTs being bad for the environment which have been going around for the past year or more.

9. Availability to buy for non-crypto users. It's never been so easy to buy an NFT, now you can do it in seconds, with a credit card, using Apple Pay/Google Play from your mobile or desktop.

10. Scarcity. So far we've seen tens of thousands of paid avatars minted, with 430 (I believe) active reddit users per month. This amount to 1 first gen nft per 10k users.

11. And this is assuming that each of us owns only one NFT. On average, I believe the number would be higher than 2 or even more, but I have no numbers to back it up. From what I've noticed in nft communities, once people get hooked on it, they'll keep buying. I somehow ended up with 29 and it look me a long time to convince myself to get the first one ????

12. NFTs seem to be bigger on Twitter/discord communities than reddit and the news has only recently reached it. Whales have only recently started paying attention to it. And there is a lot of room to grow on reddit, especially since it's crypto community is pretty big (5.5mil subscribers on here if I recall correctly), which is still growing very fast even during the bear market

13. The growth of the reddit avatar communities speak for itself. Unfortunately I had to edit this part out to avoid linking to the specific place, but those who know, know. Any subreddit activity and growth stats are easily accessible here. While you're at it, you can check out r/cc stats and see how it doesn't stop expanding even in bear market. https://subredditstats.com

14. Reddit is the 18th biggest site on the internet. Even if it was a side project, I think they treat it pretty seriously, and what makes me believe so was the well thought-out plan of distribution of free avatars, implementation of mixing features and incredible choice of various artists.

15. Speaking of artists, the fact that many of NFTs are incredible pieces of art will help many talented artists gain more fraction. The 2.5% royalties also make people feel better about spending their money on it. It will also draw new, possibly not well-known (but maybe also popular) artists to apply for the next gens.

16. Gen I collectibles of any kind, whether its NFTs or trading cards, etc are usually more highly priced than future gens simply due to the fact that they were the first to start the movement.

17. Next gens will most likely have more mints due to the interest in Gen I. This will make the first gen avatars relatively more scarce even though there will be more avatars in total. So while the market cap might not keep growing exponentially, it will likely be future gens that are less profitable while gen I is more likely to retain its value.

18. Reddit has no reason to discontinue its NFT project, as it generates a lot of revenue to them, so we can almost count that risk out.

19. Each artists distribute a collection of 3 avatars (at least so far), which on one hand, allows people to grab one regardless of their budget, since some are more affordable, and on the other hand makes collectors more likely to get all three if they like one of them, since the theme is similar.

20. A sense of belonging to the group, we can see it happening with cone heads or poop heads. It's good for the community since it encourages wholesome behaviour and cooperation to gain new members and promote the community. It also creates a certain prestige in extreme cases (see BAYC - I'm not comparing them to reddit avatars by any means since BAYC is an extreme example, but a similar mechanism is visible to a lesser degree)

21. The power of the meme. Cones and poops are the most prominent examples so far, but we'll likely see more of them in the future gens. Once the meme catches on, the price can go parabolic, we've seen that in the shitcoin space, but also with shares (GME etc)

22. And finally, we're in the bear market, especially when it comes to NFTs, where the volume on Opensea has dropped 99% (if I recall correctly) from it's ATH and reddit avatars are doing incredibly well nonetheless. One can only speculate what will happen once we survive the bear market. Of course there's a small chance NFTs will never recover to their prime popularity, but seeing how new functionality is being added I think they're bound to bounce back as a whole market or at least do well in its niche, but they are far from being dead.

Let me know if you enjoyed the read :D feel free to add more, to dispute some (or all) of these, and I hope this inspires someones to write counterpoints about how we should be bearish instead. I really appreciate if you got that far < 3