Reddit to Discontinue Blockchain-Based Reward System, Sparking User Outrage and Market Instability
Summary:
Reddit announced the discontinuation of its blockchain-based "Community Points" reward system due to scalability issues. The move, set to take effect from November 8, spurred disappointment among users and resulted in a significant drop in the value of the associated tokens, MOON and BRICK. The decision led to a backlash among the community with some users cancelling their memberships and vowing to abandon the platform.
Due to scalability issues, Reddit has decided to discontinue its long-standing blockchain-based "Community Points" reward system. The announcement was made on the r/cryptocurrency subreddit on October 17th by a Reddit representative who cited issues with expanding the service across the platform while maintaining potential future opportunities. The termination of the Community Points service, along with special membership offerings, will take effect on November 8. Following this date, community members will no longer accrue Points in their Reddit Vaults or within their communities.
Instituted in May 2020, the Community Points function served to recognize and reward users for quality participation within designated subreddits. The Points were, in essence, Ethereum-based ERC-20 tokens held within a proprietary crypto wallet service known as the "Reddit Vault". Despite having launched on the Ethereum network, the Points service eventually transitioned to the layer-2 scaling platform, Arbitrum, in an attempt to increase scalability.
Each subreddit had a unique token associated with it; for example, the r/cryptocurrency subreddit employed the Moons (MOON) token, whereas Bricks (BRICK) were used within the r/FortNiteBR community. These Points could be traded for badges and exclusive avatar features.
In reaction to the announcement, one r/cryptocurrency moderator conveyed their surprise and dissatisfaction with Reddit's decision. They assured community members that their Moons would not be lost and that Reddit was relinquishing control over the associated smart contract.
The announcement led to a sharp drop in the value of MOON and BRICK tokens, which triggered a vociferous response from the Reddit and cryptocurrency communities. A pseudonymous trader known as Byzantine General informed his 163,000 Twitter followers that Reddit had drastically undermined their community, as evidenced by the nearly 90% drop in MOON's price.
Similarly, a Reddit user going by the name Bunker Beans voiced their frustration by canceling their special membership and vowing to abandon the platform altogether, wishing ill upon whoever made the decision.
Published At
10/18/2023 1:35:46 AM
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