HomeCryptoCrypto news: Reddit shuts down Blockchain-based "Community Points"

Crypto news: Reddit shuts down Blockchain-based “Community Points”

Reddit recent decision to shut down its blockchain-based “Community Points” service has caused tremors in the crypto community. 

The technical reality about the closure of Reddit’s blockchain-based “community points” and crypto

In an unexpected twist in the crypto world, Reddit announced the imminent closure of its blockchain-based rewards service, “Community Points,” due to scalability issues. 

Launched in May 2020, this feature aimed to reward users with Ethereum-based ERC-20 tokens for their positive engagement within specific subreddits. 

However, as of 8 November 2023, the Community Points service and the special membership feature associated with it will cease to exist. 

This article analyzes the reasons for Reddit’s decision and the impact it has had on its cryptocurrency-focused community.

Scalability issues

Reddit’s official statement, shared in the r/CryptoCurrency subreddit on 17 October, cited scalability issues as the main reason for the discontinuation of Community Points. 

The platform acknowledged the potential of Community Points, but revealed that there was no viable strategy to scale the entire platform. 

This revelation puzzled many members of the crypto community, as the concept of integrating blockchain technology with a platform as vast as Reddit had promised revolutionary opportunities.

When Reddit first introduced Community Points, these tokens were Ethereum-based ERC-20 tokens stored in Reddit’s proprietary cryptocurrency service known as “Reddit Vault.” 

However, to solve initial scalability problems, the service migrated to the Arbitrum layer-2 scalability solution. This move was supposed to facilitate greater scalability and improve the user experience within the platform.

An interesting aspect of Community Points is that each subreddit has its own token. For example, the r/CryptoCurrency subreddit introduced “Moons” (MOON) as a native cryptocurrency, while the r/FortNiteBR subreddit introduced “Bricks” (BRICK). 

Users could earn and spend these tokens to obtain exclusive items and badges for their avatars, further encouraging positive engagement within their respective communities.

Reaction from Reddit’s crypto community

The decision to close Community Points was not well received by the crypto community. The r/CryptoCurrency moderator “CryptoMods” expressed his disappointment and stated that MOONs held by users will not be burned. 

The transfer functionality within the smart contract would remain operational and Reddit would relinquish control of the contract. Despite these assurances, the value of MOON and BRICK tokens plummeted after the announcement.

Cryptocurrency enthusiasts and Reddit users expressed their dissatisfaction and anger in response to the decision. 

Some even labeled Reddit’s actions as detrimental to the very community it was trying to empower. The cryptocurrency community is known for its passionate engagement, and this abrupt move by Reddit triggered strong reactions.

One pseudonymous trader, Byzantine General, took to Twitter to express Reddit’s perceived betrayal, likening the situation to a “rug pull,” a term often used in the cryptocurrency space when the creators of a project suddenly withdraw support or funds. 

MOON’s price dropped by about 90%, adding to users’ frustration.

Reddit user u/Bunker_Beans exemplified the sentiment of many when he expressed his discontent with the platform. 

Not only did they cancel their special membership, but they also expressed strong disgust with Reddit’s actions, even going so far as to wish evil on those responsible.


The decision to discontinue Community Points due to scalability issues sent shockwaves through Reddit’s cryptocurrency community. 

With tokens like MOON and BRICK losing value and users expressing frustration, Reddit’s move has raised questions about the feasibility of integrating blockchain technology into platforms of this scale. 

It is a cautionary tale for the cryptocurrency and blockchain industry, highlighting the importance of addressing scalability challenges before implementing ambitious projects on such a large scale. 

Although the promise of blockchain-based rewards is compelling, it must be balanced with the technical infrastructure to support it.