Reddit, a popular online community platform, is bidding farewell to its blockchain-based Community Points program, which includes the MOON cryptocurrency. This program, introduced three years ago, aimed to motivate Reddit users to contribute high-quality content. However, according to Tim Rathschmidt, Reddit’s Director of Consumer and Products Communications, maintaining it became too resource-intensive to justify.
The decision to terminate the program has had a substantial impact on the value of MOON, with prices plummeting by 60% to 90%. Community Points served as one of the primary uses for MOON, driving demand and encouraging user engagement on the platform. The discontinuation of the program has left many investors and enthusiasts puzzled, leading to questions about Reddit’s recent strategic choices.
The Community Points program will conclude by early November, and users will no longer accumulate points in their Reddit Vault. This sudden announcement has triggered strong reactions within the Reddit community, with many expressing disappointment and frustration.
The unexpected discontinuation has also resulted in a sharp decline in the value of associated tokens, including MOON and BRICK. Some Reddit users have criticized the platform for not providing an alternative or compensation for the sudden devaluation of tokens. Others express concern about how blockchain-based rewards programs could potentially impact their reputation and stress the importance of transparent communication and contingency plans.
Reddit has already shutdown its web page associated with the program.
Despite the backlash, Reddit has emphasized its ongoing commitment to enhance community governance and encourage contributions. The platform is actively exploring alternative rewards programs that are simpler to understand and implement.
Why did Reddit End THe Community Points Crypto Program?
Reddit attributes the end of its blockchain-based Community Points program to several factors:
- Scalability Limitations: Reddit found it impossible to scale the program effectively across the platform while maintaining it within acceptable resource constraints.
- Regulatory Environment: Uncertainty in the regulatory landscape played a role in the program’s discontinuation. Although Reddit did not specify the exact regulations, some users speculate that tax complications or securities classifications might be concerns.
- Strategic Pivot: Reddit is reallocating its investments toward products aimed at serving a broader demographic. However, the company is not entirely abandoning the core concepts of the community points. Instead, it plans to redirect resources to explore better ways of empowering and engaging communities, including developing products that align with the initial goals of the program.
More About the Reddit Community Points Crypto Program
Reddit designed the Community Points program as a blockchain-based rewards system that enabled Reddit community members to earn rewards for quality contributions and unlock special features. These Ethereum-based ERC-20 tokens were stored in Reddit’s in-house crypto wallet service, known as the “Reddit Vault.” Each subreddit possessed its own token, with r/CryptoCurrency board utilizing MOON as its native crypto asset, and r/FortNiteBR subreddit employing BRICK.
Users could spend these points on badges and exclusive items for their avatars, and the points served as a measure of “reputation” displayed next to usernames in participating subreddits to recognize the community’s top contributors. Since the points were on the blockchain, they could be displayed anywhere online and embedded in other sites or apps.
Reddit is Still a Huge Player in the Web3 Space
Reddit has made significant contributions to the crypto and NFT space over the years. Here are some examples:
- Community Points: Reddit introduced the Community Points program in 2019, which was a blockchain-based rewards system that allowed members of Reddit communities to earn rewards for quality contributions and unlock special features. The program aimed to incentivize higher-quality content and conversation on the platform. However, scalability limitations, the regulatory environment, and a strategic pivot led to the discontinuation of the program in 2023.
- NFT Marketplace: In 2022, Reddit onboarded 2.5 million crypto wallets through its NFT marketplace, which was a significant achievement for the platform. The marketplace allowed users to buy, sell, and trade NFTs, including Reddit’s own CryptoSnoos NFTs. The platform’s success in the NFT space demonstrated its potential to leverage blockchain technology to create new revenue streams and engage users.
- Minting Milestone: In less than six months, Reddit’s NFT avatar initiative reached a massive minting milestone, with users minting more than 5 million avatars. Users were able to create and customize their own avatars using NFTs, which they could then use across various platforms and social media channels.
- Web3 Marketing: Reddit’s success in the NFT space has also demonstrated its potential to teach brands about Web3 marketing. Reddit’s ability to onboard millions of crypto wallets without ever using the word “NFT” highlights the importance of creating user-friendly experiences that appeal to a broader audience.
Overall, Reddit’s contributions to the crypto and NFT space have been significant, and the platform continues to explore new ways to leverage blockchain technology to enhance user engagement and create new revenue streams.