Currently, Reddit is testing the introduction of cryptocurrency into its two sub-sections to reward community users for their participation. These two sub-sections have more than 2 million members in total.
It is understood that during the testing phase, community integration tokens will be launched in the two sub-sectors of Reddit’s r / CryptoCurrency and r / FortNiteBR. The token names are MOONS and BRICKS, and each of these two sub-sectors has approximately 1 million members. Community members can earn points tokens by providing high-quality posts and comments for these communities.
According to Reddit, these tokens are currently in the testing phase and the testing will continue until this summer. Reddit stated that its “smart contracts and mobile applications have been reviewed and audited by the independent security company Trail of Bits.”
Reddit explained: “The current community points are in the testing phase (until summer 2020). During this period, the points will be on the Rinkeby testnet … After the test phase, the community points will be transferred to the Ethereum mainnet, and the point balance will It is carried forward accordingly (but requires the user to redeem it). ”
So far, gamers are more interested in this new feature than cryptocurrency fans, because according to Etherscan data, r / FortNiteBR community tokens have created 3,800 addresses (Fortnite is a popular shooting game ), And there are 1,000 addresses in the r / CryptoCurrency community.
These community points are based on Ethereum’s ERC20 tokens, and users store them in their Ethereum addresses (the test phase is stored in the testnet address), Reddit calls them “Vaults” (gold vaults). According to Reddit’s official statement, “Every user can control his own private key, which means that the user has full ownership of the tokens he has obtained, and even Reddit can’t take them away.”
Users can use points to purchase special memberships to get exclusive features in the community, such as badges, gif pictures, stickers, and animated emoticons. These tokens can be sent and transferred to any Ethereum address, even if the wallet owner is not on Reddit-these points tokens are like any other Ethereum token.
With over 400 million users, Reddit is becoming the first major social network to successfully introduce cryptocurrency. At present, there are nearly 100 million unique addresses in the Ethereum network.
At the same time, Telegram was blocked all the way after raising $ 1.7 billion in 2018 to develop the TON network (token GRAM), and recently announced that it had cancelled plans to distribute tokens to 400 million users. And Facebook has postponed and played down Libra’s plan. Both plans have been severely affected by regulation.
The difference is that Reddit allows users to immediately use points tokens instead of selling tokens to raise money or cryptocurrencies, which should alleviate the concerns of regulators. And each sub-sector also has different points tokens. As mentioned above, the tokens in the r / CryptoCurrency community are called MOONS, and the tokens in the r / FortNiteBR community are called BRICKS, and the value of the token will also increase with each The activities of the sub-sections have changed.
This is different from Libra, which is a stable currency used by Facebook’s more than 2 billion users to pay. Regulators worry that the project may threaten the national currency.
Another difference from Libra is that Reddit’s community points are based on public ethernet tokens. American regulators already believe that the Ethereum network is sufficiently decentralized, and ETH can be considered a commodity. This is different from Facebook’s licensed Libra network. Regulators worry that the technology giant may abuse the licensed network to collect more user data.
Reddit may want to increase user engagement and position itself as a forward-looking social network. It can also obtain economic benefits from this tokenization model.
According to Reddit’s statement, initially 50 million points will be allocated, which will be allocated based on the user’s current Karma value; afterwards, point tokens will be distributed every four weeks, based on the Karma value earned by the user during this period. The benefits that the Reddit platform derives from this are: In each round of token distribution, Reddit will receive 20% of the tokens.
Over time, the number of points allocated in each cycle will decrease, so that the total number of points tokens will approach the maximum limit of 250 million. And every time the user spends his points tokens, these tokens will be destroyed, and 50% of the destroyed tokens will be re-introduced into the next month’s distribution. This total cap and the “destroy” mechanism should help increase the value of the point tokens.
Although Dapp and blockchain-based projects have been experimenting with token-based business models for many years, the Reddit platform with millions of active users may help prove whether this practical platform-specific token model is effective.
For the DeFi field, when Reddit’s points tokens are online on the Ethereum mainnet, developers of the DeFi application will be able to integrate Reddit’s points tokens into their DeFi applications, and we may soon see Reddit’s Point tokens are used as collateral for loans, or added to tokenized portfolios, and even traded on the Uniswap platform.