Reddit Halts Crypto Rewards Due to High Ethereum Fees

By BeInCrypto October 18, 2023 In Cryptocurrencies, Ethereum, KARMA, Reddit

Reddit’s popular blockchain-based rewards initiative, Community Points, is set to be discontinued. Tim Rathschmidt, Reddit’s director of consumer and product communications, highlighted the challenges in scaling the program, compounded by evolving regulatory conditions.

The decision underscores businesses’ complexities when integrating cryptocurrency incentives into their platforms.

Reddit to Discontinue Community Points

Launched in 2020, Community Points rewarded proactive participation within chosen subreddits. Essentially Ethereum tokens, these points resided in Reddit’s Vault, acting as a crypto wallet. Once allotted, they were irreversible, as neither Reddit nor its moderators could reclaim them.

Users could spend these tokens on exclusive features such as memberships, which granted animated emojis and distinctive badges. Following their expenditure, the tokens were irrevocably “burned.”

Serving as an emblem of “reputation,” Community Points appeared adjacent to usernames within active subreddits, celebrating the platform’s most significant contributors. Their presence on the blockchain meant Redditors could showcase their “reputation” universally online.

However, scaling posed significant obstacles. Initially anchored to Ethereum, high transactional fees and restricted bandwidth limited Community Points’ growth.

Reddit’s solution, transitioning to Arbitrum Nova in 2022, aimed to leverage its scaling capabilities while sustaining Ethereum’s foundational benefits. Yet, this also proved ineffectual for the social platform.

“Though we saw some future opportunities for Community Points, the resourcing needed was unfortunately too high to justify. 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,” Rathschmidt said.

During its tenure, Reddit has experimented with numerous incentives. Notable among them is the Contributor Program, a system that transforms Reddit gold and karma into real currency. This program enables Redditors with 10 gold earned within a month or users with over 5,000 karma to initiate monthly withdrawals.

Interestingly, this is not Reddit’s sole termination of a rewards scheme this year. The preceding system, which enabled users to buy gold to honor others, was discontinued after significant backlash from the community. The Contributor Program emerged in its aftermath.

“We’re still working on ways to improve community governance and empower communities and contributions. Part of why we’re moving past this product is that we’ve already launched, or are actively investing in, several products that accomplish what the Community Points program was trying to accomplish, while being easier to adopt and understand,” Rathschmidt added.

Rathschmidt also clarified the goal is not to supplant Community Points with the Contributor Program. The focus is on scalable, beneficial programs.

“Many benefits of Community Points have been integrated into the platform,” Rathschmidt concluded.

MOON and BRICK Price Performance. Source: TradingView

Followin the news, Reddit’s tokens MOON and BRICK experienced a sharp decline in their prices. MOON, associated with r/Cryptocurrency, has dropped 84% today, standing at $0.035. Meanwhile, BRICK from r/FortniteBR has seen a 59% decrease over the last day, now valued at $0.041.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

Published on