Reddit has announced its plan to terminate the blockchain-based Community Points reward service on November 8th.
Shift in focus
The social media platform has halted its Community Points program, a blockchain-based reward system, citing a shift in focus towards providing users with more scalable incentives. Tim Rathschmidt, Reddit’s Director of Consumer and Product Communications, confirmed that the increasing demands of scalability and regulatory environment have made it increasingly impractical to continue the program.
Community Points, introduced in 2020, were initially seen as a revolutionary way for Redditors to earn value by actively participating in specific communities.
Embracing simplicity and scalability
Additionally, the platform aims to prioritize other programs that offer simpler scaling options. Rathschmidt clarified that this decision is not to make room for the newly launched Contributor program but to concentrate on scalable programs that benefit a broader user base.
Reddit has already introduced some incentive measures, such as moderator rewards and the Contributor program, which are easier for users to understand and adopt.
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The rise and fall of community points
Community Points were once hailed as an innovative venture. It offered users tokens for contributing positively within specific Ethereum-based subreddits. These tokens were stored in Reddit’s Vault, an encrypted wallet accessible only to users.
Users could use these points to purchase memberships, badges, and animated emojis, among other unique features. Once spent, these points were “burned” and no longer circulated.
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Challenges of scalability
The points system also served as a reputation marker, displayed next to usernames to identify key contributors within the community. However, these advantages came with scalability challenges.
Initially transacted on the Ethereum network, the platform quickly realised that its high fees and limited bandwidth couldn’t accommodate Reddit’s vast user base. Therefore, in 2022, Reddit transitioned to Arbitrum Nova, a system promising lower transaction costs while maintaining robust security features.
Transition to other reward programs
Despite these changes, the program remained challenging to sustain on a large scale. Hence, Reddit is discontinuing Community Points and shifting its focus to other reward programs, such as the Contributor program.
This program allows users to convert their Reddit coins and karma into cash. Specifically, users earning a minimum of 10 gold coins in a month can withdraw once a month, while those with over 5,000 karma can earn $1 per gold coin.
Reddit’s changing reward systems
Reddit’s gradual phasing out of Community Points is part of a broader re-evaluation of its reward programs. Earlier this year, Reddit also terminated its coin system, a move that faced widespread protests from users due to changes in the platform’s API.
This program allowed users to buy and reward gold and other currencies, ending after a site-wide blackout protest involving over 8,000 subreddits.
Token values immediately hit
In the coming days, participants in the Community Points program will find their vaults emptied, and they will cease to earn new points in their respective communities. Tim Rathschmidt has expressed his continued commitment to improving community governance and enhancing contribution capabilities.Meanwhile, subreddit tokens $MOON and $BRICK have seen a significant drop in value following the announcement. According to data from Coinmarketcap, MOON tokens have fallen by 87.2%, trading at $0.030, while BRICK tokens have dropped by 45.88%, with a trading price of $0.055 at the time of writing.
