Mainstream social media platform Reddit plans to discontinue its Blockchain-based Community Points program next month, on November 8.
Scalability and Regulatory Concerns
According to a report by The Block, Reddit’s decision to halt the service was primarily due to scalability challenges and regulatory concerns.
“The regulatory environment has added to scalability limitations. 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,” Reddit wrote.
Reddit added that ending the program will allow it to invest in products that provide value to more of its users.
“Moving away from Points allows us to invest in products that provide value to more Redditors. We’ve also launched, or are actively investing in, several products that accomplish what the Community Points program was aimed at,” the platform said.
Launched in 2020, Reddit’s Community Points is a blockchain-based rewards system that gives users more ownership of their contributions to the platform. Through the program, users could earn points for publishing posts and comments, engaging in discussions, and helping to moderate subreddits.
The points, which come in the form of Ethereum-based ERC-20 tokens, could then be used to unlock special features within Reddit’s communities or to tip other users. Each subreddit has its own native token.
Initially, the points system was built on the Ethereum blockchain but was transitioned to Layer 2 Arbitrum Nova last year to reduce transaction fees and improve scalability.
Price Reaction
Meanwhile, the latest discontinuation report of Reddit’s points system severely impacted the price of Reddit’s community tokens dubbed Moons (MOON) and Bricks (BRICK).
MOON, the native token of the r/CryptoCurrency subreddit, fell sharply by 85% on the news, while BRICK, the native token of the r/FortNiteBR subreddit, dropped 52%.
At the time of writing, r/CryptoCurrency MOON was trading at $0.038, down 86.01% in the last 24 hours. BRICK price was $0.051, down 49.33% on the day.
