The End of Reddit’s Community Points
Reddit is discontinuing its blockchain-based rewards program called Community Points. Launched in 2020, this initiative aimed to give Redditors a stake in their communities but will be phased out by early November.
How Community Points Worked
Community Points were Ethereum tokens stored in Reddit’s Vault and were meant to incentivize user engagement in specific subreddits. These tokens were non-refundable, giving users a sense of ownership. They could be spent on memberships, animated emojis, and badges, with the spent tokens being permanently “burned.”
Scaling Challenges on Ethereum
The initial implementation of Community Points on the Ethereum blockchain faced challenges due to high transaction fees and limited bandwidth. In 2022, Reddit switched to Arbitrum Nova to address these scaling issues while still leveraging Ethereum’s advantages. However, this move didn’t solve the problems, highlighting the complexities of integrating cryptocurrency incentives.
Regulatory Hurdles and Resource Constraints
Reddit’s decision to discontinue Community Points was driven by resource constraints and evolving regulatory conditions. The effort required to maintain the program became too high, and regulatory changes further complicated matters. Despite the support from moderators and communities, the product was no longer scalable.
Other Incentive Programs on Reddit
Reddit has explored various incentive programs in the past. One example is the Contributor Program, which allowed users with certain achievements to withdraw real currency based on their gold and karma. This isn’t the first time Reddit has terminated a rewards scheme this year, as they previously discontinued a system that allowed users to buy gold due to community backlash.
Options for Community Governance
Reddit is actively seeking alternative ways to enhance community governance. The platform is investing in products that are easier to adopt and align with the goals of the Community Points program. They recognize the need for decentralized, secure, and highly scalable solutions, considering the main Ethereum network is not feasible for all Reddit users.
Hot Take: Reddit’s Community Points Program Comes to an End
After facing scaling challenges and regulatory hurdles, Reddit has made the decision to wind down its Community Points program. Although it aimed to incentivize user engagement and give Redditors a sense of ownership, the program’s resourcing needs were too high to justify. This move reflects the complexities that businesses encounter when integrating cryptocurrency incentives. However, Reddit remains committed to exploring alternative pathways for community governance and finding decentralized solutions that are secure and highly scalable.
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