Due to scalability issues, the blockchain-based Community Points tokens MOON and BRICK of Reddit will be discontinued. What led to Reddit’s decision?
Reddit’s Decision to Phase Out MOON and BRICK Tokens
Reddit, one of the world’s most popular social media platforms, is making headlines with its announcement to phase out and discontinue blockchain-based community point reward tokens MOON and BRICK by November. This decision is a significant development that has disappointed many Reddit users and crypto enthusiasts.
At its core, Reddit’s Community Points were ERC-20 tokens introduced in 2020 to incentivize Redditors for high-quality contributions within specific subreddits. These tokens had become a unique way for users to “own” a part of their respective communities and played a crucial role in driving user engagement and content quality. The points could be used for special features, unlocking badges, emotes, GIFs, and other perks on Reddit.
However, over time, challenges emerged for Reddit’s Community Points. The original system’s reliance on the Ethereum network brought concerns regarding high transaction fees and scalability, prompting a migration to the layer-2 scaling solution Arbitrum. Despite efforts to enhance the system’s performance, challenges persisted.
Community’s Backlash and Token Values Plummet
Notably, the demise of Community Points is not the first instance where Reddit faced backlash from its user base. In 2022, a decision to discontinue the coin system resulted in sitewide protests and a 48-hour blackout of over 8,000 subreddits, reflecting the community’s disapproval.
It’s essential to understand that the value of MOON and BRICK tokens was closely tied to the Community Points system. As the points program phased out, token holders started selling their holdings, leading to a sharp decline in token values. MOON tokens saw an 84% drop, with a current price of $0.035, while BRICK tokens plummeted by about 59% over 24 hours, now priced at $0.041.
One significant factor contributing to the demise of Community Points is the regulatory environment. Reddit faced uncertainty and constraints stemming from regulatory risks, making it challenging to sustain the system. Moreover, while Reddit expressed interest in the future potential of Community Points, scalability issues presented obstacles to broad implementation across the platform. Consequently, the decision to phase out Community Points by November 8 was announced, along with discontinuing the unique membership feature.
Reddit’s decision to phase out MOON and BRICK tokens represents a significant shift in its approach to blockchain-based rewards and highlights the challenges social media platforms face in integrating cryptosystems.
As the Reddit community responds with disappointment and concern, the fate of these tokens raises broader questions about the intersection of blockchain technology and social media reward systems. This development serves as a case study in the evolving landscape of crypto adoption and its impact on established online platforms.