- Reddit plans to phase out its crypto-powered Community Points rewards system by November 8th.
- ERC-20 tokens (MOON and BRICK) were introduced in 2020 to incentivize user contributions.
- The platform cites scaling difficulties and regulatory uncertainty as reasons for discontinuing Community Points.
Social media platform Reddit has announced plans to phase out its crypto-powered Community Points rewards system by November 8th, according to reporting by TechCrunch.
The ERC-20 tokens were originally launched in 2020 to incentivize high-quality user contributions. However, Reddit says the resources required no longer justify keeping the system due to scaling difficulties and an uncertain regulatory environment.
Community points took the form of tokens such as MOON and BRICK that were earned on specific subreddits. They could be redeemed for Reddit perks like badges and emojis. Both tokens saw prices plunge this week following the shutdown news.
In a statement, Reddit Director of Communications Tim Rathschmidt cited the level of effort and lack of scalability as the primary reasons for sunsetting the program. He also noted regulatory considerations likely factored into the decision.
Reddit’s shutdown comes amidst success with NFT integrations
The shutdown comes despite Reddit seeing success with NFT integrations like its Collectible Avatars. Rathschmidt confirmed those initiatives will continue even as Community Points are removed.
Reaction among Reddit users has been mixed, with some applauding the move away from crypto rewards while others are indifferent or disappointed. The project had aimed to incentivize engagement when it first launched in 2020.
While novel in concept, Reddit’s Community Points encountered hurdles around resources, product-market fit, and regulations that ultimately led to its winding down. The episode illustrates the still-experimental nature of crypto adoption, even by major tech platforms.