If I was to guess I’d say the purpose is to establish familiarity… assuming this community migrated during the great reddit migration… also i think it looks cool so…
Ideally the logo should be something simple, because it gets displayed in many different places and usually pretty small. ~500x500px should be enough, and the main content should be inside a circle, because the corners are often not displayed.
A more detailed artwork is better for the bigger banner. Most communities seem to use something around 2000x1000px or so.
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