According to Techcrunch, Reddit is ending its crypto-powered "Community Points" reward tokens, which were established three years ago to encourage high-quality contributions to the network.
A recent announcement from Reddit indicates the company will be sunsetting its blockchain-based "Community Points" reward system by early November 2022. The program launched three years ago, awarded users tokens for quality contributions in select subreddits. However, Reddit has decided to end the initiative due to the significant resources required to maintain it and uncertain regulations surrounding cryptocurrencies and blockchain technology.
According to Reddit's Director of Consumer Products and Communications, the costs to scale Community Points more broadly were too high to justify. Prices of subreddit tokens like MOON and BRICK have already plunged in response to the news, dropping 84% and 59% respectively in a 24-hour period. Reddit will still continue offering Collectible NFT avatars.
Community Points operated on the Ethereum blockchain and were stored in Reddit's Vault digital wallet. Last year, Reddit migrated the tokens to a scaling solution called Arbitrum Nova to enable faster and cheaper transactions. However, the challenges of scaling the rewards system proved insurmountable.
While the reasoning behind the regulatory concerns is unclear, some speculate it could involve complications surrounding taxes or securities laws. The removal of Community Points marks a shift for Reddit, which has otherwise rolled out community incentives like its moderator rewards program and Contributor Program for converting karma into cash.
The shutdown of the nearly 3-year-old crypto rewards initiative raises questions about Reddit's future direction and commitment to blockchain integration. For now, the discontinuation represents a major loss of value for associated tokens like MOON and BRICK.
Let us know what you loved about this article, what could be improved, or share any other feedback by filling out this short form.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators.
This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.
The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
