#39 Reddit creates an adoption tsunami

Adoption is crpyto's next frontier, and Reddit has shown the way. Also, a gift to our subscribers!

Nov 1

Reddit creates and adoption tsunami

Bear times are build times. You’re probably tired of hearing this already. But if you’re still with us during these bear times, and you’re still following the news, you’re probably aware that engineers are hard at work building what will be the rails of the next great wave of adoption. As soon as liquidity enters back the room, crypto will be ready to onboard the first billion customers, be sure of that.

But while we wait for the world to become a warmer place regarding financial stability, some unusual partners are moving the needle in the most crucial aspect: adoption.

Reddit has proven to be a force of nature in terms of crypto onboarding thanks to its combination of real-world use (yes, we are claiming that having a cool avatar in social media is a real-world use, and we will stand by it), and an improvement of crypto’s confusing UI (and when we say improvement, we say obfuscation). In just a few months, Reddit has been responsible for welcoming 3 million users into the crypto sphere (that’s 10% of Metamask users worldwide)

In July, Reddit launched a pfp collection for Redditors to access from their profiles. Users could create an avatar based on Snoo (Reddit’s mascot), or they could purchase one from a set of selected artists. These special editions were NFTs minted on the Polygon network, requiring users to create wallets for them. Although Reddit never spoke about NFTs, Polygon, or wallets: you’d buy an avatar, pay in dollars (from $5 to $100), ****and save it in a vault and all inside of Reddit’s user interface. No mentions of Polygon either, unless you freely wanted to pursue self-custody, in which case Reddit offers you clear instructions.
In August, Reddit gave away another set of artistic reinterpretations of Snoo, this time as a reward to Reddit power users. These were not initially for sale. Nevertheless, the same terms apply: you needed a vault for your avatar.

The result is that over 3M people have knowingly or unknowingly been onboarded to crypto by creating and owning their first NFT on Polygon through a familiar and friendly interface.

MATIC price has risen in that timeframe (although not very impressively).

But the rise in the number of Polygon wallets is another story.

Below is the chart in Dune Analytics that shows sales count and volume since July: there have been over 25k sales for around $7M transacted value. Since the collections sold out quickly on Reddit, what we’re seeing is probably mostly secondary sales on OpenSea.

There’s probably a significant overlap between Reddit users and crypto traders/natives/degens, so it makes sense that a secondary market has emerged quickly.

Reddit hasn’t made much money from the collection. 95% of the sales revenue went to the artists who did the reinterpretations of Snoo, and Reddit kept only 5%. - a tiny drop in Reddit’s ocean of revenue. This looks more like an experiment to find the overlap between Web 2 and Web 3. From that perspective, it’s safe to say that Reddit has done an excellent job (kudos, especially on the UX side), and the results say it’s been a success.

Remember we’ve launched a collection on Opensea? For every newsletter, we prompt Dall-E with a sentence that matches our content and then mint it as an NFT in our collection INTERPOLATIONS of Carbono Insights. Today we asked for a “sea made of wallets” after Reddit’s story.

⬡ Six Angles

We select six topics to illustrate the very different angles crypto can be approached from. We could choose dozens, but six is the atomic number of carbon… and otherwise we’d be writing for ages.

1. Onboarding crypto | Your first NFT purchase

If you were with us last week, you might remember we dissected an NFT purchase. Anatomy of an NFT purchase was our explanation of a journey from zero to hero that took you on a step-by-step journey to your first NFT purchase.

We have extended the content, including some introduction to the theory behind it all (what’s a blockchain, what’s a smart contract, what’s an NFT) in a site that contains a complete step-by-step course.

We also have a small gift to offer our newsletter subscribers. As you know, the second step after you’ve created a wallet for yourself is loading it with funds to pay for the purchase and transaction costs. If you don’t have a Coinbase (or equivalent) account already, this can take quite some time and effort. So we are willing to send funds in MATIC (something around 1 MATIC) to those who want to go through the course.

Send us an email with your address from the account with which you subscribed to Carbono Insights. We will send funds to the first 100 people who reach out.

If you follow the course, make sure to send us some feedback. Did you finish it all? What version of INTERPOLATIONS did you purchase? Did you get stuck anywhere along the process? We want to know.

Remember, you can contact us at team@carbono.com.

Without further ado, we introduce you to Onboarding crypto | Your first NFT purchase.

2. Reads | Matt Levine’s monument to journalism

If one image is worth one thousand words, you’d need 40 images to explain concepts at least, as well as Matt Levine from Bloomberg, has. Levine is an old-school financial columnist who has performed the impressive feat of writing what’s probably the most educational, entertaining balanced (and longest) article about crypto to date. This is only the second time in Bloomberg’s history that the publication devoted one whole issue to a single topic (the other was about code). Apparently,, Bill Gates likes to go on silent week-long retreats in a cabin on an island (maybe a private one) with a bag full of books that he proceeds to digest peacefully. We suggest you do the same and take Levine’s article with you (What? You don’t have an island?)

I would do well to give up writing for months and share his article in 1.000-word chunks, and our goal of helping people make an informed and secure onboarding to crypto would be half done. Or you could read it yourself. Here’s the link

3. Decentralization | Clouds over Ethereum

The Tornado Cash ban has been the most crucial wake-up call in crypto lately. The OFAC (US’ foreign affairs financial police) included Tornado Cash’s smart contract in a blacklist that banned US citizens and companies from interacting with them.

Last week, Ethereum hit an eye-opening compliance threshold: 51% of the blocks approved in 24h were compliant with the OFAC sanction.

The Ethereum network itself has not done anything to comply with this. Instead, what this event has surfaced is the multiple vectors of potential centralization, aka compliance, aka intermediation, aka censorship, loom over Ethereum.

Donovan Choy from Bankless broke down a list of all the instances that participate in the Ethereum network: from frontend platforms to node and validation software, dozens of actors can contribute to compliance/centralization/intermediation/censorship.

TL;DR, this is what happened last week, 51% of the blocks used Flashbots software (a program used by validators to maximize their profits), an organization that decided to be OFAC compliant.

4. Regulation | SBF goes solo

Sam Bankman-Fried (we cool guys call him SBF) is the founder of FTX and a charismatic leader in crypto. He is one of the most successful and ambitious entrepreneurs in the space, and his success keeps growing (lately, we’ve even heard rumors that FTX might be eyeing the purchase of Coinbase. Wow)

SBF recently published his take on what crypto regulation should look like. His article Possible Digital Asset Industry Standards covered seven aspects of crypto. How he views law should treat them: hacks, asset listing (what is a security), tokenized equities, customer protection, sanctions, allowlists and blocklists, DeFi, and, finally,, stablecoins.

Sam has been a great sport handling the response (a lot of it quite vitriolic) and listening and answering constructive criticism. Many claim that he has gone too far, suggesting measures that could kill the spirit of decentralization (like his agreement with regulating DeFi storefronts like financial institutions).

Sam says he’s just suggesting some tradeoffs that he understands are painful but that the alternatives are either no regulation or bad regulation, and that neither are acceptable; his critics say that he’s accepting some points of no return as valid. “We cross that line and we lose”, according to Eric Voorhees.

If you have a few minutes, this article goes into enough detail explaining the situation.

If you want to dive deep, read Sam’s post and the reply from Eric Voorhees. They represent 90% of the debate out there.

5. Finance | TradFi is bullish

Back in the day, news about crypto adoption from institutional investors would move the needle regarding BTC and ETH prices. Today price action is too concerned about the macro environment, but the news is as relevant or more as it used to be. Only in the last months, we’ve seen announcements ofr crypto projects coming from all these TradFi institutions proving their long-term commitment to innovation.

6. NFTs | To fee or not to fee

The most heated debate in the NFT space lately concerns royalties. Royalties were initially one of the reasons artists embraced NFTs: this new form of distributing their creations allowed them to hard-code fees in every purchase made in an artwork’s journey across the market. They could, for example, guarantee programmatically that they would receive 1% of the sales price in every secondary purchase.

Lately, royalties have become a burden for marketplaces and a competitive weapon. NFT marketplaces fought to attract traders by trimming fees to the minimum, including artist revenue. Magic Eden, for example, Solana’s #1 NFT marketplace, initially refused to eliminate royalties but had to make them optional eventually to stop the loss of market share.

Whose side are you on in this story?

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