Reddit to Shut Down Blockchain-based Rewards Service "Community Points" due to Scalability Concerns

Scalability Issues Force Reddit to Close "Community Points"

Reddit has announced that it will be closing its blockchain-based rewards service known as "Community Points" due to concerns over scalability. The decision comes as the platform recognizes the limitations of expanding the service across its entire platform.

End of an Era: Community Points Service to be Phased Out

Reddit made the official announcement on October 17th in the r/cryptocurrency subreddit, stating that while there may be future opportunities for Community Points, there is currently no viable way to scale it on a larger scale. As a result, the Community Points service, including special memberships, will be discontinued starting November 8th.

Incentivizing Quality Content: The Rise and Fall of Community Points

Launched in May 2020, the Community Points feature aimed to reward users for positive engagement in specific subreddits, with the goal of promoting higher-quality content. The points were Ethereum-based ERC-20 tokens stored in Reddit's in-house crypto wallet service called the "Reddit Vault."

Migrating to Arbitrum: Seeking Scalability Solutions

Initially built on the Ethereum network, the Community Points service later migrated to the layer-2 scaling solution Arbitrum in order to improve scalability. Each subreddit had its own token, such as Moons (MOON) for r/cryptocurrency and Bricks (BRICK) for r/FortNiteBR, which users could spend on badges and exclusive items for their avatars.

Mixed Reactions: Disappointment and Anger

The news of Reddit's decision to shut down Community Points has sparked disappointment and anger among Reddit users and crypto enthusiasts. The value of MOON and BRICK tokens plummeted following the announcement, with some expressing frustration over the sudden drop.

In response to the original statement, a moderator from r/cryptocurrency expressed their disappointment but assured users that their tokens would not be burned and that Reddit's control over the contract would be removed.

Pseudonymous trader Byzantine General took to Twitter to criticize Reddit, claiming that the company had essentially "rugged" their community by discontinuing their native cryptocurrency. The tweet included a screenshot showing MOON's price dropping by approximately 90%.