Original author:Jaleel、Joyce，BlockBeats

Original editor: Zhang Wen, BlockBeats

On October 18, TechCrunch reported that Reddit decided to terminate its nearly three-year-old blockchain-based community points service. Tim Rathschmidt, Reddits director of consumer and product communications, said: While we see some future opportunities for community points, the resource investment required is too high to be sustainable. In addition, the regulatory environment also adds to the difficulties in this regard.

Reddit will remove Community Points on November 8th. These points are essentially fungible Ethereum tokens stored in Reddits Vault, which operates as a cryptocurrency wallet.

After the news was announced, the price of Moons (MOON), the native token of the Reddit r/CryptoCurrency community, fell by 85%, the Bricks (BRICK) token of the r/Fortnite subreddit fell by 67%, and the Donut (DONUT) token representing the community points of the r/ethtrader subreddit ) token fell 66%.

Black swan events in the Reddit crypto community

existr/CryptoCurrencyIn the community, the announcement of the discontinuation of the community points beta version and special membership was marked with [SERIOUS] in bold. The post stated that due to regulatory environment and resource constraints, the community point tokens will be canceled no later than November 8.

Such a sudden announcement caused the MOON token to fall by 82% in three minutes. Many users dumped their tokens in time, while users in other time zones were not so lucky. After Australian and Asian users woke up, the currency price was already in chaos. Anyone holding tokens will usher in a new day in this way. The community said.

More than 3,000 comments gathered under the post, with most community members expressing dissatisfaction. The announcement does include an explanation of the new program, the New Contributor Program, where eligible users will be able to earn cash based on the Karma and gold they earn through qualifying contributions. But community members aren’t buying it.

Speculations about the rug ensued, The price plummeted hours before it hit my inbox, so there must be something shady going on, and If Reddit sold off before the news Well, that’s a little bit annoying. They do hold a lot of tokens.” The community saw very suspicious transaction records on the chain, pointing out that some addresses completed large sales and escaped before the Token points cancellation notice.

The community further accused Token of being centralized and even wanted to report the matter to the IRS for investigation: Reddit is run by POS and they dont care about their community at all.

In this black swan incident in the Reddit crypto community, the crypto trading platform Kraken suffered heavy losses. Therefore, in the post of [SERIOUS] Points Topic, Kraken co-founder Jesse Powell replied: I personally dont think it is a regulatory issue, but I know that regulatory issues are complex and evolving, and maybe Reddit doesnt want to bother.

In Jesse Powells view, Reddit should at least provide a remedy and redemption path. Let people buy collectible avatars with points at some ratio or other. It shouldnt just destroy the value of your holdings while providing nothing in return.

Moving from Ethereum to Arbitrum Nova

Three years ago, Reddit received a lot of discussion about the novel blockchain points system that would be launched based on Ethereum. In a video originally posted by the community manager of decentralized domain name project Unstoppable Domains, it was revealed that Reddit is provisioning an Ethereum wallet for each user and using ERC 20 tokens.

Reddit officially announced the news shortly after, which also sparked a huge response in the crypto community. According to some accounts on Reddit, these so-called community points actually represent ownership of Reddit subreddits. The points token system was initially only launched on r/Cryptocurrency and r/FortNiteBR (the abbreviation of the English name of the Fortnite game), and the tokens are MOONS and BRICKS respectively. At that time, the total number of users in these two communities reached 2.4 million, which can be said to be a very important starting point.

Reddits mechanics are fairly straightforward: it allocates tokens based on users monthly contributions to subreddits. After four weeks, Reddit will publish each users contribution during that time and give the community a week to provide feedback or propose changes. Tokens will be issued directly to users’ wallets after the final list is finalized. These community points serve multiple purposes, from unlocking special features to displaying a users reputation online.

However, when things seem perfect, problems begin to arise. Transaction fees with Ethereum are obviously a huge problem. Ethereum has high transaction fees, limited bandwidth, and scaling community points is a big challenge for Reddit.

For example, putting all Reddit users on the Ethereum main network is not feasible and prohibitively expensive. The Community Points page further explains why. So they researched, adapted and migrated to Arbitrum Nova.

Arbitrrum Nova is Arbitrrums solution specifically for promoting games and social applications, and it can be said to be the best choice for Reddit.

Points tokens that were closed at peak moments

After migrating to Arbitrum Nova, coupled with the influence of Reddit, r/Bitcoin and r/Ethereum have reached new subscriber numbers. In the week between June 4 and June 11, the r/Bitcoin subReddit had more than 364,000 new subscribers, and the r/Ethereum community had 461,000 new subscribers. The total number of r/Bitcoin subscribers currently exceeds 5 million, and the total number of r/Ethereum subscribers exceeds 2 million.

What’s even more shocking is that when Reddit’s community tokens Moons and Bricks were listed on Kraken, their prices skyrocketed.

After the crypto trading platform Kraken announced the listing of Reddit community tokens Bricks (BRICK) and Moons (MOON) and opened deposits and withdrawals on the Arbitrum Nova network, Reddits r/CryptoCurrency community token MOON and r/Fortnite subReddit community token BRICK The increases reached 42.1% and 83.4% respectively within 24 hours.

Despite its impressive growth, in addition to regulatory issues, resource constraints and other reasons, the difficulty in achieving cross-platform applications is a fatal flaw in the development of community tokens. In addition, the token points mechanism has also worsened the community discussion atmosphere to a certain extent, and meaningless content discussed for the sake of tokens is flooded in various sections.

The price of Reddit’s Community Points token has been falling for the past three months. It is difficult to recreate the peak moment half a year ago, and this ending may be inevitable.

How does this avid wife lover and crypto OG influence Reddit?

Reddit co-founder Alexis Ohanian is an avid wife lover and is married to a famous tennis star"serena williams"Very loving. And there is a little-known identity behind this Reddit pioneer: a veteran player in the cryptocurrency and NFT fields.

Alexis Ohanian and his wife, picture source network

In 2014, Ohanian purchased 50,000 ETH for only $15,000, when the price of ETH was only 30 cents. The Armenian descendant said that his ancestors lost all their property in World War I, and cryptocurrency allowed him to see the potential of inalienable property, so he participated in Ethereum’s ICO. However, looking back on the deal now, he still feels he bought too little.

Since then, Ohanian used the proceeds from his early investments in ETH and Coinbase to found venture capital firm 776 in 2020. So far, the company has invested in 29 cryptocurrency-related startups and has more than $750 million in assets under management.

In an interview with Yahoo Finance in 2020, Ohanian said that more and more top engineers, product developers, and designers are building real solutions on the blockchain, and the encryption market is entering spring. Ohanian also revealed in the interview that he will continue to invest part of his assets in cryptocurrency.

Through Reddit, millions of users learn about NFTs and Web3

Not only that, everyone has discovered a lot of wonderful things in Ohanians wallet. His investment vision is not limited to Ethereum. Ohanians OpenSea account has collected 548 NFT works since its establishment in 2018, involving 34 different projects. He is a veritable collector.

On September 14, Reddit co-founder Alexis Ohanian tweeted: Going to the Met Gala with my wife’s CryptoPunk (which I bought for her). In the accompanying picture, he is wearing a CryptoPunk #2950 pattern brooch on his suit.

It is not difficult to see his love for his wife from the NFT attribute selection. Attributes such as headband, skin color, facial features, and accessories match Serena Williams in many ways. There are only 406 Punk wearing a headband, plus brown skin, female and other attributes, the number is even smaller. He bought 7 of them, gave one to his wife as a gift, and made it into a brooch to attend a dinner party with his wife.

It can be seen from the source of his collection that he actively participates in the sale of NFT projects and purchases NFT directly from the project party. Only a small number of NFT works are purchased from the secondary market.

Related Reading:The founder of Reddit is actually an NFT veteran, with a total of 548 NFT works in his wallet》

Reddit, the social media giant, seems to have been influenced by Ohanian and has begun to get involved in the NFT field. In July 2021, Reddit sold 4 1/1 avatar NFTs for the first time. These avatars were sold for 42-115 ETH, with a maximum contract price of $261,000 at the time.

Reddit began airdropping its four collection avatar series based on the Polygon blockchain in August 2022. People who purchase NFT can use them as personal photos on Reddit and other platforms, or sell them on secondary markets such as OpenSea . When selling NFTs, Reddit fully considered the needs of Web2 users in the community. Users can easily create wallets with familiar password settings and do not have to purchase through cryptocurrency exchanges - 40,000 collection NFTs can only be purchased through fiat currency at a fixed price.

The first generation of NFTs sold out after weeks, with nearly 2.8 million Reddit Collectible Avatars holders. Reddit then released the second generation of 40,000 collectible avatars in October, and this batch of NFTs sold out within 24 hours. By December, cumulative sales of Reddit Avatar NFT had exceeded US$10 million, with a total sales volume of approximately 40,000. During the launch of NFT, approximately 3 million wallets were created on Reddit, while OpenSea had only created 2.3 million wallets at that time.

This year, Reddit seems to be letting itself go and exploring more new ways on NFT. In partnership with Ubisoft, a Rabbids-themed Avatar NFT has been launched for Reddit users to claim for free.

Additionally, Reddit has taken a number of measures to prevent malicious purchases. When the fourth-generation NFT contract was deployed on the Polygon blockchain in July, purchases were restricted based on account age and other indicators and a CAPTCHA verification system was implemented to prevent newly created accounts from purchasing NFT in large quantities for flipping.

The fourth generation of NFT is as popular as ever and sold out on the day of release. On October 8, the number of holders of the Collectible Avatar NFT series exceeded 20 million, the total minting volume was close to 25 million, the market value returned to above US$100 million, and the total sales exceeded US$41 million. It can be said that millions of users learned about NFT and Web3 through Reddit.

Vitalik was a frequent visitor, is Reddit no longer crypto?

Regarding Reddit community points, Pantera partners have spoken highly of its ability to cleverly connect user interests and community participation, which can bring 400 million users to the encryption field.

As the fixing needle in the crypto circle, Vitalik, the founder of Ethereum, is often active on Reddit and interacts with the community. On January 8, 2022, Vitalik Buterin once shared on Reddit: I am optimistic about the future of multi-chain, but I am not optimistic about cross-chain.

On January 11, 2023, Vitalik appeared again and participated in the ninth AMA hosted by the Ethereum Foundation (EF) research team on Reddit. The AMA had many important figures answering questions online, including Ethereum founder Vitalik Buterin, as well as researchers such as Danny Ryan, Dankrad Feist, Justin Drake and Domothy. Vitalik mainly discussed the future development direction of Ethereum, the challenges and opportunities of DeFi (decentralized finance), the progress and expectations of Ethereum 2.0 and his views on the current cryptocurrency market.

Related Reading:V God 2023’s first Reddit AMA 12 questions 12 answers》

Interestingly, not only Vitalik Buterin, but also the San Francisco branch of the US Secret Service has held an AMA session on Reddit.

According to a public post on r/cryptocurrency, the event is to educate crypto users to protect them from crime: “In San Francisco, we have a group dedicated to keeping cryptocurrencies and their users safe. We are led by Embrace Composed of Future Currency agents and analysts, we are eager to share our work with this cryptocurrency community and provide resources and education to help keep your funds safe. We are also eager to learn from you.”

With the ban on point tokens, the original close relationship between Reddit and the crypto community seems to be gradually fading. Is Reddit no longer crypto? Many people asked.

Although this social platform has made countless contributions to the entire digital currency and NFT field in the past and has had a deep relationship with it, the reality of compliance requirements requires Reddit to adopt a more prudent attitude. To avoid potential compliance risks, Reddit became less and less connected to the crypto space, eventually choosing to be more isolated from it.

This is undoubtedly a regrettable decision, but it also reflects the real challenges and tensions that still exist between the regulatory and crypto worlds. Not only token and NFT holders, many people hope that Reddit can regain its intimacy and enthusiasm for crypto.