Preserving Community Token Value: Kraken Co-founder Criticizes Reddit's Lack of Contribution

Reddit Ends Community Points, Tokens Plummet

Kraken co-founder Jesse Powell has criticized Reddit for ending its blockchain-based reward service, Community Points, without offering any alternative benefits to token holders. This comes after Reddit announced that it would be sunsetting the Community Points beta, citing scalability limitations and regulatory issues. The decision has caused two related tokens, MOON and BRICK, to plummet in value.

Kraken’s Response

Powell expressed his disagreement with Reddit’s decision, stating that he doesn’t see the regulatory problems. However, he understands that Reddit may not want to deal with the complexities involved. Powell suggested that Reddit should provide a redemption path for token holders, allowing them to convert their points into other assets or receive special badges based on their holdings.

The Purpose of Community Points

Community Points were introduced by Reddit in 2020 as a way to reward users for their engagement on the platform. The Ethereum-compatible ERC-20 tokens could be used to purchase perks like emojis and badges. However, due to scalability issues, the service migrated to Layer 2 Arbitrum Nova in August 2022.

Reddit’s Explanation

Reddit justified its decision to end Community Points by stating that it wants to focus on developing products that provide value to a wider range of users. The platform claims to have launched or invested in several such products.

Hot Take: Reddit Faces Backlash for Ending Community Points

Reddit is receiving criticism for abruptly ending its Community Points program without providing any alternative benefits for token holders. This move has caused the value of related tokens, MOON and BRICK, to plummet. Kraken co-founder Jesse Powell expressed disappointment with the decision and called on Reddit to offer a redemption path for token holders. The Community Points program was introduced in 2020 to reward user engagement on the platform, but scalability and regulatory issues led to its discontinuation. Reddit claims to be focusing on other products that provide value to a wider user base.