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Reddit is removing its blockchain project and scaling down community points. The company is removing its program designed to reward creators and developers with “internet points” based on blockchain, prioritizing reward programs that are less challenging to scale. Tim Rathschmidt, Reddit’s director of consumer and product communications, said:
“We saw some opportunities for Community Points in the future, but unfortunately, the necessary resources were not justifiable,”
“This effort has been added following the regulatory environment. The moderators and communities supporting Community Points have collaborated incredibly – but the product is no longer suitable for scaling.”
Community Points will be phased out by early November and were introduced to Redditors as an opportunity to “own” a part of their communities. Initially launched in 2020, Community Points were rewarded to users engaging positively in selected subreddits and were used to encourage better content and discussion. Points could essentially be exchanged with Ethereum tokens stored in Reddit’s Vault, functioning like a cryptocurrency wallet.
Once issued, neither Reddit nor moderators could retrieve a user’s Community Points. Points could be used in unique features like memberships unlocking special badges and animated emojis. Once spent, points were “burned.”
Community Points were displayed as a “reputation” metric next to usernames to signify top contributors in communities. Since the points were on the blockchain, the program intended to allow users to display their “reputations” anywhere online and could be embedded in other sites or apps. Even if banned from Reddit, points would still exist on the blockchain, but users would lose access to their Vaults, rendering the points useless.
However, scaling Community Points posed a significant challenge for Reddit. The pilot program initially used Ethereum, which had high transaction fees and limited bandwidth.
“For example, putting all Reddit users on the main Ethereum network would not be feasible and would be costly,” it was stated on the Community Points page. “Therefore, we have intensely researched decentralized, secure, yet highly scalable solutions.”
In 2022, Reddit moved Community Points to Arbitrum Nova, built on Ethereum. “This allows for the implementation of scaling technologies that enable ultra-low-cost transactions, very high energy efficiency, and strong security guarantees,” as stated in the FAQ. But even this was not practical for Reddit. Since launching Community Points, Reddit initiated several community incentives like the moderator rewards program and Contribution Program, offering real money rewards by converting Reddit gold and karma points to cash. Under the Contribution Program, Redditors who earn at least 10 gold in no less than 30 days can request a monthly withdrawal. Reddit users with more than 5,000 karma points (total votes) can earn $1 per head.
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“We are still continuing to enhance community management and ways to empower communities and their contributions,” said Rathschmidt. One of our reasons behind this product’s discontinuation is that we’ve already launched or are actively investing in a range of products that achieve what the Community Points program was trying to do; these are being adopted and understood more easily.”
He added that these features should be available for any community’s use, just like what Community Points could purchase. When the program is entirely discontinued, beta participants will no longer see their Points in their Vaults, and they will no longer earn points in their community. Rathschmidt couldn’t give an exact number of the subreddits being cut but said you could “count them on your fingers and have a few fingers spare.”
This is not the only reward program they’ve ended this year. Earlier this year, Reddit announced it was ending its coin system, which users could use to give Gold and other currencies to other users. This announcement came after protests across the site against Reddit’s API changes, resulting in more than 8,000 subreddits being shut down for 48 hours, and was quite unpopular among already disgruntled Reddit users. Rewards and existing coins under the previous reward program were available until mid-September. Reddit announced the Contribution Program later that month.
Rathschmidt emphasized that the company didn’t remove Community Points for the Contribution Program but did so to prioritize programs that are more beneficial and scalable for more users. “This is just one example. Now, we can scale a series of products that are trying to achieve what the Community Points program was trying to do – like subreddit karma and gifs,” he said. “Many of the benefits of Community Points are already integrated into the platform.”