Reddit is killing blockchain-based Community Points


Reddit logo displayed on smartphone with Reddit logo in the background
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Reddit is winding down Community Points — the blockchain-based “internet points” program designed to reward creators and developers — in favor of prioritizing rewards programs that are less difficult to scale.

“Though we saw some future opportunities for Community Points, the resourcing needed was unfortunately too high to justify,” Reddit’s director of consumer and product communications Tim Rathschmidt told TechCrunch. “The regulatory environment has since added to that effort. Though the moderators and communities that supported Community Points have been incredible partners — as it’s evolved, the product is no longer set up to scale.”

Community Points, which will be phased out by early November, were promoted as a chance for Redditors to “own” a piece of their community. First launched in 2020, Community Points were awarded to users who positively engaged in select subreddits in order to incentivize better content and conversation. The points were essentially interchangeable Ethereum tokens stored in Reddit’s Vault, which operated as a cryptocurrency wallet.

Once awarded, neither Reddit nor moderators could take back another user’s Community Points. The points could be used on special features, like memberships that unlocked unique badges and animated emojis. Once spent, the points were “burned.”

As a measure of “reputation,” Community Points were displayed next to usernames in participating subreddits to mark the community’s biggest contributors. Since the points were on the blockchain, the program aimed to allow users to display their “reputation” anywhere online, and could be embedded in other sites or apps. If users were banned from Reddit, their points would still exist on the blockchain, but they would lose access to their Vault — rendering the points useless.

But scaling Community Points proved to be an immense challenge for Reddit. The pilot program originally used Ethereum, which had high transaction fees and limited bandwidth.

“Putting all Reddit users on the main Ethereum network, for example, would be infeasible and prohibitively expensive,” the Community Points page said. “Therefore, we have researched heavily into solutions that are decentralized, secure and yet highly scalable.”

Reddit moved Community Points to Arbitrum Nova in 2022, which is built “on top” of Ethereum.

“This enables it to apply scaling technologies that enable ultra-low-cost transactions, very high energy efficiency and strong security guarantees,” the FAQ stated.

Reddit will start paying you real money for good posts

But even that was impractical for Reddit. In the years since launching Community Points, Reddit has rolled out a number of community incentives, like the moderator rewards program and the Contributor Program, which awards actual money by allowing eligible users to convert their Reddit gold and karma into cash. Under the Contributor Program, Redditors who earn at least 10 gold within a 30-day period are eligible for a monthly withdrawal. Reddit users who have over 5,000 karma (total upvotes) can earn $1 per gold.

“We’re still working on ways to improve community governance and empower communities and contributions,” Rathschmidt said. “Part of why we’re moving past this product is that we’ve already launched, or are actively investing in, several products that accomplish what the Community Points program was trying to accomplish, while being easier to adopt and understand.”

He added that the special features that Community Points can buy, like gifs, should be available to any community. Once the program is fully phased out, beta participants will no longer see their points in their Vaults, and will no longer earn points in their communities. Although Rathschmidt said he couldn’t give an exact count of the number of subreddits affected by the cut, he admitted that “you’d be able to count them on one hand and have a finger or two left over.”

It’s not the only rewards program that Reddit has killed this year. Earlier this year, Reddit announced the end of its coin system, which allowed users to purchase Gold and other currency to award other users. The announcement came in the aftermath of the sitewide protests against Reddit’s API changes, which culminated in a 48-hour blackout of over 8,000 subreddits, and was wildly unpopular among Reddit’s already jaded users. Awards and existing coins under the previous reward program were available until mid-September. Reddit announced the Contributor Program later that month.

Rathschmidt noted that the company isn’t phasing out Community Points to make way for the Contributor Program, but rather to prioritize on programs that are “more set up to scale and benefit more users,” like the Contributor Program.

“It’s one example. Now, we’re able to scale several products that accomplish what the Community Points program was trying to accomplish — like subreddit karma and gifs,” he continued. “Many of the benefits of Community Points have already been built into the platform.”

Reddit is killing its Gold awards system

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