Is Reddit really launching Ethereum tokens for millions? Community Points explained
Last month, a Reddit user with the moniker “MagoCrypto” revealed in a number of posts that Reddit was seemingly beta testing an Ethereum-based feature called “Community Points,” which would allow users to earn ERC-20 tokens to get special access to certain communities — known as subreddits.
Mago indicated that Reddit also included basic Ethereum wallet functionality into the applications of the testers, of which he was one of them.
On May 13, this project was confirmed by Reddit admin “Jarins,” who published a post titled “Introducing r/CryptoCurrency Moons” to the CryptoCurrency subreddit.
As the leak indicated, the post indicated that the system being implemented is called Community Points and will exist on Ethereum, “where they are managed by a suite of smart contracts that handle balances, transfers, distribution/claiming, and purchasing Special Memberships.”
While the post was informative, not all aspects of the project were explained. Enter Adam Cochran — a crypto angel investor, partner at MetaCartel Ventures, and a moderator at r/cryptocurrency, the subreddit involved in this rollout.
Reddit’s Community Points project explained
According to Cochran, these tokens will first be rolled out for r/CryptoCurrency and r/FortniteBR — two prominent forums that purportedly have 20 million monthly active users between them. For the cryptocurrency community, the Points will be fittingly called “Moons”; for the Fortnite gamers, the Points will be called “Bricks.”
Though other subreddits are expected to get the tokens in the future, with visuals Cochran released mentioning the subreddits of Stellar and EthTrader, both of which were seemingly involved in the pre-launch testing of these coins.
These tokens will first be made available to users via a distribution scheme whereas users of the forums will get coins based on how much they have contributed to the community, and can be claimed via the built-in Ethereum “vault” in the latest version of the Reddit app on Android and iOS.
Community Points will have a number of uses including but not limited to tipping other users, buying badges and awards, getting more say in certain polls, or being spent on the new “Special Membership” feature.
These features, Cochran explained, are in line with Reddit’s attempt to convert towards (or at least dabble in) a more crypto-based business model.
Theoretically, though, they can be used for anything. Maybe one day we’ll be paying for coffee with Ethereum tokens earned on the CryptoCurrency subreddit.
Reddit won’t be using Ethereum’s mainnet… yet
One revelation Cochran conveyed outside of the Medium posts is, for the time being, Community Points will be located on the Rinkeby testnet for Ethereum software, with this being the contract address for MOON tokens. The Reddit post indicated that the Points will be on the testnet until it exits beta after this upcoming summer.
This means that for the time being, it will be hard to integrate these points into platforms like decentralized exchanges or DeFi, which could increase their functionality and adoption.
But this may be for good reason: due to the vast number of users that visit the subreddits involved in this pilot and already-increasing Ethereum fees, by keeping Moons and Bricks transactions off the main net, blockchain clog can be kept to a minimum for now.
It’s massive for Ethereum
While the project is still somewhat in a beta testing/pilot phase, analysts expect for Reddit’s new token system to be huge for Ethereum.
Under the assumption that Community Tokens will eventually be released to the entire Reddit userbase, Mythos Capital founder Ryan Sean Adams shared the tweet below outlining why these new Ethereum tokens are making him so bullish.
430m daily Reddit users
Reddit is the 7th most visited site
64% of Reddit users 18-24
Reddit just announced they’re rolling out their new community tokens on Ethereum
Instant ETH wallets to millions of gen Zs
ETH is ridiculously undervalued
Don’t say we didn’t warn you pic.twitter.com/ay7CgmufEN
— Ryan Sean Adams – rsa.eth ? (@RyanSAdams) May 14, 2020
From how he sees it, as Reddit is the world’s seventh-largest site with a large Generation Z population — purportedly 64 percent of users are age 18-24 — the introduction of cryptocurrency functionality directly into the application will spark massive Ethereum adoption, making ETH “ridiculously undervalued.”
With over 430 million daily users, this may be the case, but it remains unclear to what extent Reddit will be “shilling” Ethereum so to say and how young people will adapt to cryptocurrency, if at all.