What are the red skull coins for?

Collecting red skulls will give you a certain amount of diamonds and coins when you reach a particular total e.g. 10 red skulls will give you ten diamonds and 500 coins at the first level (or Tier 47 - press the "Rewards per Tier" to see how many red skulls you need to collect the specific number of diamonds and coins).

When you first start out on Bronze level, it may take a while to move through the tiers, but once you can upgrade your weapons to the recommended damage level for each level (868 - silver, 1468 - gold etc.), you'll be able to move through the tiers faster and be able to collect more diamonds and coins (without having spend real money).

Be aware your total will reset to zero each week when the WOPS time period finishes, but then you can again just collect the diamonds and coins on Tier 47 onwards faster.