Reddit to Discontinue Blockchain-Based Community Points Program - Blockchain.News

Reddit to Discontinue Blockchain-Based Community Points Program

Reddit is discontinuing its blockchain-based Community Points program due to scalability issues, moving towards more scalable rewards programs. Despite initial promise, high transaction fees and bandwidth limitations on Ethereum led to a transition to Arbitrum Nova in 2022. However, scaling challenges persisted, prompting the phase-out by early November 2021. The termination caused a significant drop in associated token values. Reddit now focuses on other community incentive programs like the Moderator Rewards Program and the Contributor Program.

In a bid to prioritize scalable reward programs, Reddit is terminating its blockchain-based Community Points program, a decision that has garnered significant attention in recent days, according to Techcrunch. The system, conceived to incentivize positive engagement among users, will cease operation by early November 2021.

Program Overview

Launched in 2020, Community Points were awarded to users who actively contributed to certain subreddits, thereby encouraging enriched content and dialogue. The points, essentially Ethereum tokens, were stored in Reddit’s Vault, a designated cryptocurrency wallet. Once rewarded, these points were immutable, neither Reddit nor moderators could revoke them. Points could be spent on exclusive features such as memberships unlocking distinctive badges and animated emojis.

Post expenditure, points were “burned” and showcased alongside usernames in the corresponding subreddits as a reputation marker. The blockchain foundation of the program facilitated users to exhibit their “reputation” virtually anywhere online, embedding it on other platforms or apps. Even if users faced a ban on Reddit, their points remained intact on the blockchain, albeit losing access to their Vault, rendering the points futile.

Scaling Hurdles

Reddit initially utilized the Ethereum platform for the pilot program. However, the high transaction costs and limited bandwidth of Ethereum posed significant challenges. The official Community Points page mentioned, “Putting all Reddit users on the main Ethereum network, for example, would be infeasible and prohibitively expensive.” Consequently, in 2022, Reddit transitioned Community Points to Arbitrum Nova, a layer built atop Ethereum, aiming for enhanced scalability through ultra-low-cost transactions, increased energy efficiency, and robust security. Despite these adjustments, scaling the Community Points proved an insurmountable challenge for Reddit.

Impact and Reactions

The termination of Community Points has impacted the value of associated tokens drastically. Post-announcement, tokens such as MOON, BRICK, and DONUT witnessed a sharp decline over 60%. Users reported substantial losses, with some pointing to suspicious transactions conducted shortly before the announcement.

Alternate Reward Systems

Reddit has since shifted focus towards other community incentives like the Moderator Rewards Program and the Contributor Program. The latter allows eligible users to convert Reddit gold and karma into real cash. Under this program, users attaining at least 10 gold within a 30-day span are qualified for a monthly withdrawal. Those with over 5,000 karma can earn $1 per gold.

Tim Rathschmidt, Reddit’s director of consumer and product communications, emphasized the platform's ongoing efforts to enhance community governance and empower communities and contributions. The objective now is to invest in and develop products that are simpler to adopt and understand, providing similar benefits to the discontinued Community Points program.


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