A video posted to Reddit claims to confirm that Reddit is preparing to launch a reputational currency built on the Ethereum blockchain.
More details appear to have leaked regarding Reddit’s rumored Ethereum (ETH)-based “Community Points” system. A video posted to the platform purports to show a draft of FAQ copy explaining how the system will work.
If authentic, the video appears to confirm that Reddit is preparing to launch a reputational currency on Ethereum.
Video claims to confirm Reddit’s ERC-20 based ‘Points’ system
Community Points are described as “a new tool that represents ownership of a subreddit.”
Users can earn the points by “making contributions to the subreddit, such as posting and commenting” — meaning that users will be rewarded based on the activity generated by their engagement with the platform.
The copy asserts that the Community Points will comprise ERC-20 tokens hosted on the Ethereum blockchain:
“Community Points are fully controlled by the people who own them. They live on the Ethereum blockchain, which uses the same technology to guarantee property rights and control. Even Reddit cannot take them away.”
‘Community Points’ system describes utility tokens
Community Points will be available in subreddits that opt in to the system, with each subreddit able to give the points custom names.
The documentation asserts that Reddit’s points will have a variety of utilities including purchasing premium memberships and voting in polls. Reddit also encourages subreddits to create their own use-cases for the tokens:
“As a unit of ownership, Points can be used in different ways by different communities. Over time, communities will find ways to use points that are unique to them and fit their culture.”
The documents also include a blank page that is titled “Tipping and Transfers” — suggesting the system may be intended to facilitate micropayments.
Reddit’s tokens will feature burn mechanism
Points that are used to purchase special memberships will be “burned,” with the copy emphasizing that the burn mechanism will “mak[e] everyone else’s share of Point go up”, rewarding the community as a whole.
Memberships will unlock exclusive features within a subreddit, including badges and animated emojis that appear alongside a user’s avatar when they comment.
Memberships can also be purchased with dollars from Reddit, with the copy stating that “Reddit will burn some of its own Points on their behalf” when accepting fiat payments.
Community Points have deflationary supply dynamic
Community Points are distributed monthly based on contributions made to subreddits. Points can be claimed from the Ethereum blockchain using a signature.
Half of all points generated by a subreddit will be reserved for specific contributors to each community. 10% will be distributed to moderators, while 20% will be reserved for both Reddit and “the broader Reddit community” respectively.
At launch, the system will see 50 million Points distributed amongst existing Reddit users based on how much ‘Karma’ — the platform’s current reputational metric — that they have received in individual subreddits.
An additional 50 million points will be created and issued during the first year of the system going live. From there, Reddit plans for the issuance of Community Points to be deflationary, with newly created supply gradually decreasing as it approaches the intended cap of roughly 250 million.
Half of all burned tokens will be reintroduced into supply each month, with the documentation stating that future distributions will gradually level off to a fixed number of points.