Here's more about today's news about this via Laura Shin's Unchained website: author: Juan Aranovich

Posted October 17, 2023 at 5:54 pm EST.

Reddit has discontinued its Community Points program, a move that has led to a sharp drop in the value of associated tokens and ignited strong reactions from the community.

Initially unveiled in 2020, the program aimed to incentivize user engagement within select subreddits by awarding Ethereum-based tokens, MOON and BRICK, specific to the r/Cryptocurrency and r/FortniteBR subreddits, respectively.

Tim Rathschmidt, Reddit’s director of consumer and product communications, cited scalability issues and an evolving regulatory environment as the primary reasons for the phase-out. “The resourcing needed was unfortunately too high to justify,” Rathschmidt told TechCrunch, adding that the regulatory landscape has further complicated matters. The tokens, redeemable for various Reddit perks, were stored in Reddit’s Vault, a crypto wallet.

The market impact was immediate. MOON tokens plummeted by 84%, currently priced at $0.036, while BRICK tokens decreased 40%  and are now valued at $0.058.

The decision has not been well-received by the Reddit community. Pseudonymous users have expressed strong sentiments, with comments like “hope you made plenty of money with us, bastards,” “there are going to be some lawsuits here (…) a rug pull is not taken lightly” and “you guys crushed thousands of people’s dreams and fortune within seconds.”

Reddit initially used the Ethereum network for the Community Points program but transitioned to Arbitrum Nova in 2022 to mitigate high transaction fees and limited bandwidth. This move also proved ineffective for scaling the program.

Earlier this year, Reddit ended its coin system, which allowed users to purchase Gold and other currencies to award other users. The platform has since introduced the Contributor Program, which allows users to convert Reddit gold and karma into real currency.

While Reddit is moving away from blockchain-based rewards, the platform is still exploring other avenues for community governance and contributions. Rathschmidt emphasized that Reddit is investing in products that aim to achieve what the Community Points program initially sought but in a more scalable and understandable manner.