Hi. It’s Dana. Welcome to the Web 2.5 newsletter featuring news, content, musings, and memes at the intersection of Web 2.0 and Web 3.0. This week we've got: 

• A deep dive mid-pool cannonball into Reddit's Collectible Avatars

• A plug for our latest podcast episode with Alex Cavoulacos, CEO of Meta Angels

• The full weekly roundup of news and views in web2 meets web3

So, welcome to the NFT Factory, folks. We're off to tour the world of Web 2.5. 

💥 Breakdown of the Week: Reddit 💥

I feel a little normcore writing about the Reddit Collectible Avatars given there's been SO much chatter on the topic this week. BUT, I'm just going to go with it because

1. It's a great example of a Web 2.0 company pushing into Web 3.0, and

2. It's fun. So here we go...

The story begins in 2020, when Reddit launched avatars, a non-blockchain-based experience where users could customize an avatar based on hundreds of choices. The collectibles are based on Snoo, the Reddit alien mascot. They were pretty cool.

Then in July of this year, Reddit released an avatar series, a collection of avatars that users could purchase and customize. They all cost under $100 and came in various edition sizes.

But Reddit basically did the equivalent of hiding vegetables in your mashed potatoes. Rather than position these new avatars as NFTs (which they are), Reddit positioned them as "digital collectibles" that required a "vault" (aka a wallet) to set-up. Basically — no one knew or cared that there was blockchain in the background.

Ok cool. I'm sure a few people set them up??

Well, as it turns out, Reddit's Chief Product Officer Pali Bhat revealed last week that over 3 million wallets were created by users to collect the NFTs. And then with the news that these avatars were wildly popular, secondary market sales of the NFT avatars started surging to all-time highs as collectors saw Reddit’s NFTs as a major trading opportunity. 

Why it Matters. My take aways here:

1. This is a good case study in the less we talk about the tech, and the more we just focus on using it to build innovative customer experiences, the more adoption will follow. 

2. Redditors traditionally hated crypto and NFTs. It's a reminder that not only can great customer experiences drive adoption, but they can change perception too.

3. Participatory models thrive in web3. This wasn't a purchase and display activation. Users were the creators, which was key to its success. 

💥 New Podcast Episode 💥 

This week on the Web 2.5 podcast we talk with Alex Cavoulacos, CEO of Meta Angels, about the NFT-enabled membership community she co-founded and how the team is building a global, digital community unlocking real-world value.

We cover Alex's career before web3, her first crypto experience, Meta Angels' quest to explore tokenized networks, the benefits of building in web3, infusing technology with values, brand partnerships, revenue opportunities, technology platforms for community building, the Angel Labs accelerator, and how newbies can get involved in web3.

Have a listen on Apple, Spotify, or wherever you get your podcasts. 🎧

💥 Weekly Web 2.5 News Roundup 💥

🏆 The One Piece to Read

If you could only read one piece this week, make it Bloomberg's full cover-to-cover issue titled The Crypto Story by reporter Matt Levine. It's a super digestible and easy-to-follow account of exactly what's in the subtitle of the article: Where crypto came from, what it all means, and why it still matters.

🚀 Markets

In good news, the market was up big time this week, with Bitcoin back over $20,000 (the first time since early October) and Ethereum back over $1,500. But as the great Poison once said, every rose has its thorn. The price surge resulted in a "short squeeze," with $979 million in short positions (traders betting against the coins) being wiped out when the price increase meant they didn't have sufficient funds to keep the trades open. Screen grab from Crypto.com this morning.

👩‍💻 Tech

Apple announced this week that apps can offer crypto and NFT trading services, as long as they do not unlock additional content or functionality that is purchased outside of the app. Basically, all transactions much be made through an in-app payment mechanism, of which Apple takes a 30% cut. While the move is not surprising, it certainly solidifies Apple's position: What happens at Apple, stays at Apple. 

Twitter is believed to be developing a new web3-based wallet that supports crypto deposit and withdrawal. The news has not yet been confirmed by the social media company.

Meta's Quest Pro, the first of Meta's new high-end class of VR headsets, is now available for shipping. If it's not on your holiday list, maybe start by finding a friend willing to drop $1,499.99 on you — and then add it to their holiday gift list for you.

Smartphone manufacturer Vertu revealed the Metavertu, a "web3 phone" with web3-friendly features like turning photos and videos into NFTs, creating a wallet in a few clicks, and accessing a suite of decentralized applications. The price? $41,000. If you couldn't find a friend to buy you the Meta VR headset, then this is probably off the table as well.

🧳 Fashion, Beauty & Accessories

Rimowa, the luxury suitcase brand, is teaming up with RTFKT, the digital powerhouse acquired by Nike back in December, to create NFTs backed by limited edition physical luggage. 

Burberry and Minecraft have collaborated to create the in-game experience titled Burberry: Freedom to Go Beyond. Players will have access to the unique universe, along with 15 downloadable skins focused around "fashion, fantasy, and adventure." The duo also created an IRL clothing capsule collection, which launches on November 1st. 

L'Oréal, Meta, and French business school HEC Paris are partnering to launch a startup acceleration program, which will provide startups with the tools and resources needed to grow their web3 knowledge and expand their presence in the metaverse. 

Paris Hilton's 11:11 Media collaborated with makeup empire Urban Decay to create "Cryptoween," a Halloween party hosted in the virtual Roblox universe, "Paris World." The experience will be available to users through November 1st. 

🎙️ Music, Movies, Culture

Calling all Middle-earth adventurists! Warner Bros. and web3 company Eluvio have developed a "Lord of the Rings: Fellowship of the Ring" NFT. But wait — the NFT is more than just a collectible. The NFT is essentially an on-chain DVD, where holders have access to a content bundle including a 4K copy of the film, bonus behind-the-scenes footage and stills, and exclusive film-inspired AR collectibles. 

Paul Oakenfold, English record producer and DJ, will bring his legendary performances to the metaverse with the debut of "Perfectoverse" on December 22nd. Oakenfold's digital space will feature a 72-minute set with grand audio and visual experiences. 

Black Sabbath legend Ozzy Osbourne is brining his legendary Ozzfest to the metaverse (the first time it will be held virtually). Ozzy himself is planning to appear as one of the headlining acts. Other stars participating include rapper Soulja Boy and DJ Eddy-Temple Morris. 

AGIA International has plans to turn the Fyre Festival Island-failure into a NFT-gated luxury community. The limited edition villas will be strictly sold via NFTs. 

📺 Media & Advertising

Proctor & Gamble transformed Gillette Stadium into "GilletteLabs Stadium" in a mixed-reality advertisement before the October 24th Bears vs. Patriots game on ESPN. If you weren't sure who the sponsor was...

💰 Business & Finance 

The U.S. Internal Revenue Service (IRS) has released new guidelines that will ensure all digital assets, including stablecoins, NFTs, and cryptocurrencies, are taxed under the same rules. Taxpayers who disposed of digital assets through a sale, exchange, gift, or transfer or received NFTs as compensation must report and pay capital gains on the transactions. If you don't have an accountant, now feels like a good time to find one.

🏛️ Politics 

Former Finance Minister, Rishi Sunak, has been chosen as the new UK Prime Minister after Liz Truss' sudden resignation due to her failed economic stimulus plan. Sunak has already put plans into motion that will give local regulators more power over the crypto industry. 

✨ Web3 Deals, Drops & Alpha

Azuki raised $2.5 million by auctioning off eight golden skateboards, which can be burned to redeem an IRL gold-plated one. Each physically backed token (PBT) weighs 45-pounds and is not recommended for riding (ha). 

Blur, the self-proclaimed fastest NFT trading marketplace, announced its official launch (it was buzzy!), offering zero trading fees and an airdrop of its native token to collectors.

Brian Armstrong, Coinbase Global Inc. CEO, plans to sell 2% of his company holdings over the next year to fund scientific research. The businessman plans to transfer funds to companies such as New Limit and Research Hub. 

🔢 By The Numbers

NFT Creators Have Earned $1.8 Billion in Royalties to Date: Galaxy Digital. Decrypt.

Web3 grows in online searches as interest in Bitcoin declines: Google Trends. Cointelegraph.

™️ Trademarks Don't Lie

Let's hope they solve getting seasick in the metaverse. The trademark application of the week goes to:

📚 Weekend Reading

Building the Bridge between Web 2.0 and web3. TechCrunch.

How Web3 could impact the film and television industries. SCREENDAILY.

Puma's Returning to the Fashion Arena — This Time, with a Web3 Layer. VOGUE Business. 

Weirdly, Taylor Swift Is Extremely Close to Creating a True Metaverse. The Atlantic.

🌶️ Hot Takes

Nike's Venture into Web3 Isn't About Tech — It's About Culture. CoinDesk

Nokia Believes the Metaverse Will Replace Smartphones in the Future. Bitcoin.com.

💡 Education Corner

What I Learned From Diving Headfirst into the Metaverse. CNN.

How to Build Partnerships with NFT Projects and Communities. a16z Crypto. 

🧰 Jobs

Refresh that resume and let's hit the job boards.

• Head of Marketing - Digital Gaming, Mattel. Apply.

• Head of Game Design, Dapper Labs. Apply.

• Web3 Community Manager, Geneva. Apply.

📣 Tweet of the Week

Couldn't have written a better one myself.

💀 And Finally

Me telling my kids it's almost bedtime. But make it web3.

🫶 And that’s a wrap! Thanks for reading Web 2.5. See you out there in the interweb3s. 

How'd We Do?

DISCLAIMER: This newsletter is strictly educational. None of this is financial or investment advice — and not a solicitation to buy or sell any assets or to make any financial decisions. Please always Christian DYOR (Do Your Own Research).