Reddit cancels blockchain-based community points system! MOON and BRICK token prices plummet over 60%

TechCrunch reported that Reddit will gradually phase out its blockchain-based community points system in November, shifting to other reward programs that are easier to scale and reach more people. At that time, all points will no longer be redeemable or usable. The news sparked debates from both supporters and critics, and the panic sentiment was reflected in Reddit-related tokens, plummeting by over 60%.

What are Community Points?

Community Points, launched on Reddit in May 2020, reward users actively participating in specific subreddit communities, aiming to encourage valuable content creation, engagement, and community contributions.

These points were initially based on Ethereum's ERC-20 tokens, stored in a Reddit Vault similar to a crypto wallet, and later migrated to the L2 network Arbitrum Nova for low-cost and efficient network operations.

These tokens can be used to unlock special features on Reddit, including badges, animated emojis, GIFs, and other exclusive benefits.

Additionally, Community Points serve as a symbol of "reputation" displayed next to a user's username in subreddits to showcase their contributions to the community.

End of Community Points System

Reports indicate that Reddit is shutting down its three-year-old Community Points program, with the complete cessation of point rewards and redemption set to occur no later than November 8.

Once the program is fully terminated, participants will no longer see their points in the Vault or be able to earn points in their subreddits.

Reddit's Consumer Product Manager, Tim Rathschmidt, stated that the discontinuation of the Community Points system will impact only a few subreddits, attributing the closure to:

While we saw the future potential of the Community Points program, unfortunately, the resources required to sustain it have become too great, and changes in the regulatory environment have further complicated its viability.

He added, "While the moderators and community members who supported Community Points have been great partners, we have not been able to effectively scale it across the site."

Tim also noted that Reddit will prioritize reward mechanisms that are easier to scale and benefit more users, such as the recently launched Contributor Program or Reddit Gold, which allows users to truly earn money.

Mixed Reactions Abound

The moderators of the r/cryptocurrency subreddit clarified: "However, the community's native token $MOON will not disappear or be burned, and the smart contract is still operational."

It is worth mentioning that some users expressed agreement, believing that this move will effectively deter "farmers" who continuously post meaningless comments for points, thereby improving the overall quality of posts.

On the contrary, Adam Cochran, Partner at Cinneamhain Ventures, expressed regret on Twitter:

Reddit has been trying to launch crypto products for years and finally achieved this goal, but the outcome is disappointing.

He also explained, "Reddit has been one of the few large social network companies confident in entering the crypto space, so their exit will also have an impact on other companies looking to enter this field."

MOON, BRICK, DONUT Tokens Experience Sharp Declines

While the affected subreddits are relatively few, the news has already caused significant declines in Reddit-related community tokens, as follows:

• The native token of the r/CryptoCurrency community, Moons $MOON, has dropped by 86% from its low point
• The contribution reward token of the r/Fortnite subreddit, Bricks $BRICK, has fallen by 67%
• The community points token of the r/ethtrader subreddit, Donut $DONUT, has declined by 66%