Reddit is sunsetting Community Points, the blockchain-based reward points awarded to users for their contributions. The social media platform cited the inability to scale the points system and regulatory uncertainties as reasons for the shutdown.
A Reddit admin announced on Tuesday that the company would wind down the program by November 8.
“At that point, you’ll also no longer see Points in your Reddit Vault nor earn any more Points in your communities. Though we saw some future opportunities for Community Points, there was no path to scale it broadly across the platform,” he announced.
Reddit launched Community Points in May 2020 as a trial program to reward good behavior. The company minted the tokens on the Ethereum network, and users could use them to pay for premium features. In time, it expanded the program, allowing users to trade their tokens and migrate to the Layer 2 network Arbitrum as Ethereum could not scale to meet demand.
The program’s expansion included allowing various communities to issue their customized tokens. r/Cryptocurrency, a subreddit for the digital asset community, issued MOONS; r/Fortnite, which focuses on the popular video game, issued BRICKS; while traders on r/Ethtrader received DONUTS. All the tokens were stored on Reddit Vault, the platform’s built-in wallet.
Reddit will wind down support for all these tokens in three weeks. The tokens’ prices have all dipped drastically, with MOON wiping out 85% of its value within hours.
Commenting on the shutdown, Reddit’s director of corporate communications, Tim Rathschmidt, blamed regulations and scaling challenges.
“Though we saw some future opportunities for Community Points, the resourcing needed was unfortunately too high to justify,” he told TechCrunch.
“The regulatory environment has since added to that effort. Though the moderators and communities that supported Community Points have been incredible partners—as it’s evolved, the product is no longer set up to scale.”
While Reddit prided itself in using blockchain for the Community Points, it still missed the mark with the implementation. It claimed the use of blockchain allowed users to showcase their reputation anywhere online. However, the users didn’t own the tokens. If users were banned from the platform, they would lose access to their Vault and their tokens forever.
Looking at the history of @Reddit with bitcoin, Ethereum, Arbitrum and beyond, it's pretty clear to see that the self-proclaimed geniuses that run the company and the communities have an almost complete inability to do something valuable.
In fact, Reddit has been a net negative…
— Kurt | GorillaPool.com (@kurtwuckertjr) October 19, 2023
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