Reddit is winding down Community Points, the blockchain-based “internet points” program designed to reward creators and developers, as the platform shifts its focus towards more scalable rewards programs. The decision to discontinue Reddit’s community points mirrors the challenges in expanding this program and the increasing intricacies of the regulatory landscape. While initially hailed as a way for Redditors to take ownership of their community, the program will be phased out by early November, marking a significant shift in Reddit’s strategy.

Scaling Challenges Faced by Reddit’s Community Points

Community Points were introduced in 2020 with the aim of incentivizing positive engagement in select subreddits, thus promoting better content and conversations. These points were essentially Ethereum tokens stored in Reddit’s Vault, functioning as a cryptocurrency wallet. Notably, Community Points, once awarded, couldn’t be taken back by Reddit or moderators, and they could be used for unlocking special features like memberships, badges, and animated emojis. However, as Reddit attempted to scale the program, it encountered formidable challenges. The original use of Ethereum was plagued by high transaction fees and limited bandwidth, making it infeasible for all Reddit users. In response, Reddit moved Community Points to Arbitrum Nova in 2022, built “on top” of Ethereum, which offered more scalable and cost-effective solutions.

Regulatory Hurdles

Apart from scaling issues, Reddit faced growing regulatory complexities that impacted its Community Points program. Blockchain technology and cryptocurrencies are subject to evolving legal frameworks in various jurisdictions. Hence, navigating the regulatory landscape added to the resources required for Community Points’ sustainability. The increasing uncertainty and potential risks associated with blockchain-based rewards systems prompted Reddit to rethink its approach, ultimately leading to the decision to phase out Community Points.

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