Reddit Halts Crypto Rewards Due to High Ethereum Fees

Reddit, one of the world’s largest social media platforms, has made the difficult decision to discontinue its blockchain-based rewards program known as Community Points. Launched in 2020, this initiative aimed to reward active participation within select subreddits with Ethereum-based tokens, creating a sense of “reputation” for users and offering exclusive features in exchange for these digital assets. However, challenges surrounding scalability and evolving regulatory conditions have forced Reddit to halt the program.

The Rise and Fall of Community Points

Community Points were initially tethered to the Ethereum blockchain, which led to high transaction fees and limited bandwidth, hindering the program’s growth. In 2022, Reddit attempted to address these issues by transitioning to Arbitrum Nova, a scaling solution built on Ethereum. Unfortunately, this transition also failed to provide the necessary scalability.

Tim Rathschmidt, Reddit’s director of consumer and product communications, explained the situation: “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.”

This decision is not an isolated incident for Reddit. Earlier in the year, Reddit discontinued a system that allowed users to purchase gold to honor others due to community backlash. This led to the introduction of the Contributor Program, which enabled users to convert Reddit gold and karma into real currency.

The Future of Reddit Rewards

Despite the discontinuation of Community Points, Reddit remains committed to exploring ways to improve community governance and empower contributors. Rathschmidt clarified that the goal is not to replace Community Points with the Contributor Program but to develop scalable and user-friendly programs.

Rathschmidt concluded, “Many benefits of Community Points have been integrated into the platform.” However, following this announcement, Reddit’s tokens associated with Community Points, MOON and BRICK, experienced sharp declines in their prices. MOON, linked to the r/Cryptocurrency subreddit, dropped 84% in a single day, standing at $0.035, while BRICK from r/FortniteBR saw a 59% decrease, now valued at $0.041. This reflects the community’s disappointment in the discontinuation of a program that once held promise for enhancing the Reddit experience.