Historically, there have been few successes among social media platforms’ various blockchain projects. Between Meta’s failed Libra/Diem stablecoin and Elon Musk’s ambitious but ultimately unrealized plans for Twitter, Reddit’s moderate success in the space marks it out as an exception.
However, not even Reddit has managed to keep all its blockchain dreams alive. More than 3 years after the launch of “Community Points,” the platform announced on Tuesday, October 18, that it will wind down the tokenized award system. With Reddit apparently dialing down its blockchain ambitions, several community-owned tokens tanked on the news.
Collectively known as Reddit tokens, MOON, BRICK and DONUT are Ethereum-based tokens used by the r/CryptoCurrency, r/FortNiteBR and r/ethtrader subreddits.
In posts made to the affected subreddits on Tuesday, representatives of Reddit’s community team said that although “we saw some future opportunities for Community Points, there was no path to scale it broadly across the platform.”
It added that “the regulatory environment has added to scalability limitations,” explaining that it will now focus on alternative award systems that aren’t blockchain-based and are easier to implement at scale.
Upon news that Community Points was on its way out, the prices of all three major Reddit coins collapsed. At the time of writing, MOON, DONUT and BRICK were respectively down 86.6%, 56.4% and 46.8% in the previous 24 hours.
Although the tokens themselves still exist, the decision to sunset Community Points means there will be no native support for such community-owned tokens.
However, the impact on individual subreddits varies.
Despite a major crash in the price of DONUT, members of the r/ethtrader subreddit were surprisingly upbeat about the prospect of keeping their in-house token project alive without Reddit’s support.
Originally conceived separately from the Community Points initiatives, DONUT tokens will remain largely viable as a form of in-house currency subreddit members can use among each other.
In one post , u/good2youall explained that “r/ethtrader shall continue to run unscathed due to the distance they’ve created from Reddit.”
As a result, Reddit will discontinue only specific features. These include the “harberger banner,” whereby users could buy the right to change the subreddit’s banner using DONUT tokens, and the enhanced member experience that comes with “special membership” of r/ethtrader.
Meanwhile, distribution, governance and tipping with DONUT tokens will all continue unchanged. The r/ethtrader moderator LivingFondant1419 has also proposed a workaround for the community to reinstate the harberger banner feature.
For r/ethtrader members, a long-held commitment to decentralization has ensured that the community owns the underlying Ethereum contract behind DONUT. However, it’s not the same for all subreddits that participated in the Community Points experiment.
Over on r/CryptoCurrency, many members have condemned Reddit’s decision to sunset Community Points as a rug pull.
Meanwhile, moderators have expressed an interest in emulating r/ethtraders’ more decentralized model. To do this they have proposed either taking control of the smart contract, which is under Reddit ownership, or airdropping a new token one-for-one with current MOON balances.
In contrast to the generally bitter sentiment expressed on r/CryptoCurrency, many r/FortNiteBR members appeared to welcome the end of Community Points.
Expressing a feeling shared by many community members, one user celebrated the fact that “crypto shills are finally gonna go and maybe some good posts will start to appear.”