Back in 2020, Reddit launched Community Points, an initiative that rewarded high-quality posters by giving them Ethereum-based tokens that could be spent on badges and emojis on the platform.

At the time, the experiment seemed fun and allowed users of the platform to show off their flair in a way that proved that they had earned it.

However, the website’s administration has called it quits, citing a lack of scalability – or rather, a price tag too high for the amount of scalability they would need. The FAQ page regarding these rewards has since gone dark.

Looking For Alternatives

Tim Rathschmidt – Reddit’s director of consumer and product communications – announced that the program would end by early November and stated that the cost of keeping the system live exceeded its benefits.

According to Rathschmidt, only a few subreddits would be severely affected by the decision. The original project – which was to put every user on Reddit in touch with blockchain – would be prohibitively expensive.

“You’d be able to count the subreddits on one hand and have a finger or two left over. Putting all Reddit users on the main Ethereum network, for example, would be infeasible and prohibitively expensive. Therefore, we have researched heavily into solutions that are decentralized, secure and yet highly scalable.”

In 2022, Reddit tried to cut costs by moving the project to Arbitrum Nova. However, even Layer-2 solutions proved to be too expensive.

As a result, Reddit’s administration has decided to end the program and look for alternative ways of rewarding its users.

Uncertain Regulation Contributed To The Decision

Another nail in the Community Points coffin was the uncertain regulatory environment surrounding cryptocurrencies, according to Rathschmidt.

“Though we saw some future opportunities for Community Points, the resourcing needed was unfortunately too high to justify. The regulatory environment has since added to that effort. Though the moderators and communities that supported Community Points have been incredible partners — as it’s evolved, the product is no longer set up to scale.”

Although it’s unlikely that the SEC would have decided to take aim at Reddit of all platforms, the perceived unpredictability of the regulator still gave the administration pause.

Since the news broke, cryptocurrency tokens affiliated with Reddit – such as r/CryptoCurrencies MOON token – have plunged. MOON, for instance, is down 86.4% at the time of writing, according to CoinGecko. DONUT, the EthTrader subreddit’s community points token, has also plunged by over 50%.

The post Reddit Winds Down Blockchain-Based Community Points, Cratering Related Tokens appeared first on CryptoPotato.

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Filed under: Bitcoin - @ October 18, 2023 6:11 am