In 2020, Reddit launched “Community Points” as a token on Ethereum. Now the platform no longer supports the tokens. Most affected users react with relief.
Actually you’re not allowed to do that. Once you have issued a token that people invest in, you have to stick with it until the bitter end. But the discussion platform Reddit has decided to abandon Community Points.
Community Points are ERC20 tokens on Ethereum that Reddit introduced in May 2020 to reward users of certain subforums for their activity. The Community Points were also traded outside of Reddit, sometimes for quite a bit of money.
Three and a half years later, it turns out that the project was apparently a flop. A Reddit employee explains that the decision was made to suspend Community Points on November 8th. Although they still exist as tokens on Ethereum, they are neither visible in the “Reddit Vault” nor does Reddit participate in the distribution to users. They recognized some future potential of the tokens, “but there was no way to scale the model broadly across the entire platform.”
On the one hand, the regulatory climate became frostier. On the other hand, Reddit is working on other projects that achieve the same goal more efficiently and in a more scalable manner, such as the “Contributor Program,” which directly translates collected karma into money.
Some users felt the consequences directly in their wallets: the prices of all community tokens fell massively. The “Moon Tokens” from the subred r/cryptocurrency from 22 to 2.5 cents, the “Bricks” from the Fortnite subforum from 9.6 to 2.8 cents, and the “Donuts” from r/ethtrader from 1.3 to 0.4 cents.
Admittedly, each of these tokens has seen lower prices and extreme spikes. The moon tokens cost 44 cents in September, while the bricks cost just 2 cents in May (only to rise to more than 30 cents in August).
The experience gained from the tokenization of activity in forums is likely to be one of resignation. At least the affected communities react to Reddit’s announcement of the death of Community Points less with sadness than with relief.
“Goodbye,” writes a user on r/cryptocurrency, “Monetizing votes has accomplished nothing except incentivizing spam/bot/low-quality content, just as pretty much everyone predicted. I don’t think it’s an exaggeration to say that 90 percent of the sub was either bots or people who put in so little effort that they might as well be bots.” Another cheers: “I’m thrilled that the moons are disappearing, and I hope that the quality of this sub will slowly increase again when shitcoin farming disappears.” The mods would like to continue the project, but are receiving rather cautious interest.
The announcement received similar reactions on r/FortNiteBR. “Even though I have 20,000 bricks, this is good news. “Finally fewer spam bots,” wrote one, “Goodbye, I’m so tired of the Brick Farm posts,” wrote another. Two years ago, someone in this subforum complained that the Bricks had “ruined it.” The subredd was “an empty shell of its former self. It barely reaches more than 3,000 active users, and I think the bricks are the main reason for that […] Almost every piece of content here is unfunny and unloving memes posted daily to collect as much karma as possible, which is then converted into bricks…”
However, things are different on r/ethtrader. Here disappointment predominates – and at the same time hope. The community in this sub is still sticking with the donuts, will continue to distribute them manually and try to integrate them. In part, this goes hand in hand with plans to decentralize the community beyond Reddit and make Donus the basis of another decentralized community network.
Overall, however, it can be said that Reddit’s attempt to monetize activity through tokens has failed miserably. Maybe ERC tokens were the wrong way to do this – but maybe the basic idea is already the wrong one.