Reddit crypto-based rewards

‘This is adoption’—Reddit rolls out crypto-based rewards system

The Community Points program pilot will reward frequent and popular posters in two subreddit forums with Ethereum-based tokens usable on the site. If successful, it could put a cryptocurrency wallet in 430 million Redditors’ hands

Reddit has officially unveiled Community Points—a crypto-based rewards system that will allow users to build their reputations and accrue ERC-20 tokens on the Ethereum blockchain.

The social network said contributors will be able to earn points whenever they submit quality posts or make meaningful comments that drive conversations forward. Users within a community can also tip their points to others, and transfer them between Ethereum blockchain addresses.

Reddit crypto-based rewards
Will Ethereum help Snooville take back control of the Internet? (Photo: Reddit)

According to a Reddit spokesperson, the program is being tested on the r/CryptoCurrency and r/FortNiteBR subreddits—the term used to describe a forum devoted to a particular topic.

According to Reddit, these points can be used to unlock memberships with special premium features, including badges, animated emojis, and GIFs. Much of this content will be specific to the particular subreddit in which the points were earned.

There’s potentially a bigger benefit for members who have a high profile on a subreddit. A Reddit blog post revealed that users with a substantial amount of Community Points will have the opportunity to take part in weighted votes, giving them a louder voice when big decisions are being made.

“We continuously run experiments to explore features that engage our users and communities,” the spokesperson said. “With Community Points, we’re working exclusively with two communities to test this feature and gather feedback from our users.” 

A big step

Community Points are a significant milestone for Reddit, because these ERC-20 tokens will actually fall outside of its control. The company explained that this is a good thing for subreddits. These forums are going to have full control of how these reward systems are implemented, and users will take full ownership of the points they receive.

Reddit crypto-based rewards
Reddit mascot Snoo and friends are excited by Community Points rewards (Photo: Reddit).

You could argue that there are a few kinks to be worked out. This decentralized approach will mean that moderators will be unable to dock points from disruptive users or those who post offensive content. It’s possible that some people could end up getting a disproportionate amount of points if one of their posts goes viral.

Then there’s the problem of who will pay the “gas”—tiny amounts of Ether that cover the cost of completing transactions on the blockchain. Reddit has said that it plans to foot the bill for now, but suggested that this wouldn’t be a permanent solution.

Steps have been taken to ensure that votes and points aren’t manipulated, as those who are caught engaging in this practice run the risk of being banned from communities altogether.

The Community Points system is going to be in beta through summer 2020 on a testnet, but it will migrate to the Ethereum mainnet soon afterwards.

From rumors to reality

Speculation that Reddit was experimenting with a crypto-based points system first emerged last month.

The company refused to confirm the rumors in April, but many of the features unveiled on May 14 match up.

Reddit crypto-based rewards
Reddit hopes its Community Points tokens will help free the internet (Photo: Reddit).

As reported by Modern Consensus at the time, Reddit co-founder Alexis Ohanian is a big advocate of cryptocurrencies. With partner Garry Tan, his venture capital firm, Initialized Capital, has invested in a number of cryptocurrency and blockchain companies, including Coinbase, Polychain Capital, and Cointracker.

Reddit’s blog post introducing Community Points to the public was accompanied by a cartoon strip called “A New Frontier,” in which it expressed hope that the Internet could undergo a new dawn and “be free once again.”

The social network believes this reward system could help Internet users wrestle back control from mega tech companies—enabling them to “rebuild stronger, more independent communities, even better than before.”

As you would expect, the r/CryptoCurrency subreddit has jumped onboard the Community Points train with gusto. Given how these tokens can be stylized in a way that’s appropriate to each forum, this subreddit’s points are going to be known as Moons—a reference to the direction they want Bitcoin to go.

A tranche of 50 million Moon tokens will to be distributed to existing users based on the karma points that they have already accrued. From there, five million new moons will be released on a monthly basis, gradually decreasing until a cap of 250 million tokens is met.

An upbeat response

Users in the r/CryptoCurrency subreddit appear to be impressed with the concept so far.

Others noted that they had encountered some small kinks while trying to collect their Community Points, but praised Reddit for attempting to roll it out even if they do encounter a few technical hiccups along the way.

“If we can all just stand back for a second and look at this objectively,” wrote u/jpreddit200. “This is adoption, this is what it looks like, it’s slow, it’s underappreciated and it’s doubted and clunky.”

Another member, u/WeLiveInABubble opined that this could be the beginning of Web 3.0, and spell an end to an Internet where a user’s digital existence is purely for the benefit of huge global corporations. “This is an exciting step for cryptocurrency as a whole. The whole basis of cryptocurrency is to create economies that we share and interact with between us without intermediaries,” he wrote.

Some members of the subreddit also believe that this could have a bullish effect on the price of Ether in the long run.

As another r/CryptoCurrency member pointed out, if Community Points proves a success and is rolled out across the whole platform, it will put an Ethereum wallet in the hands of 430 million Redditors.

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Connor Sephton is a journalist with an interest in cryptocurrencies, personal finance, and financial inclusion—as well as the challenges the crypto industry faces in achieving mainstream adoption. He owns cryptocurrencies.