What are Reddit Community Points?
Back in the beginning the internet was a free and open place.
Websites were rarely made by corporations, it was often just people, and the internet was a place you explored. People came together around passionate topic matters and built communities that flourished.
But, they flourished a bit too much and became highly profitable — and so in turn large tech conglomerates started to gobble up the web.
Reddit has long stood as one of the last bastions of the initial feeling of the internet. A site with communities run by their users, where anyone can come together and create value.
But, even Reddit struggled to make this model work because the web has been built around advertisements and monetizing your users — which is unethical and just gross.
So Reddit has created a new model of “Community Points” that they hope can help users to break free of walled gardens and tech conglomerates; and instead create their own rewarding communities.
What are Community Points:
In Reddit’s own words:
“Community Points are a way for Redditors to own a piece of their favorite communities. As a unit of ownership, Points capture some of the value of their community. They can be spent on premium features and are used as a measure of reputation in the community.”
Ultimately points are an ERC-20 token. A type of cryptocurrency on the Ethereum blockchain.
Users will earn them based on their contributions to a subreddit.
Each subreddit has their own uniquely named and designed community points. Such as /r/Cryptocurrency’s “Moons” and /r/EthTrader’s “Donuts”
Each subreddits unique token has a maximum of 250M tokens that will ever be created.
How Do I Earn Them:
Users earn Community Points from submitting comments and posts to the sub. When users upvote or downvote that content the score will help decide how many points the user earned during the weekly distribution.
To start there will be 25M tokens released, per subreddit, to account for historical contributions.
Each week, the amount of tokens released will get smaller and smaller until the cap of 250M tokens is hit (sometime near the year 2050!)
Where can users find their tokens?
Users are able to find the tokens in their “Reddit Vault” which they must set up on the Reddit mobile app.
The “Reddit Vault” is a type of cryptocurrency “wallet” — it stores the users balances on a ‘blockchain’ just like Bitcoin. This means that the users own the tokens and no one can take those tokens away from them (not even Reddit!)
This wallet will show users their balances in each of the communities where they have tokens — and show them how they can spend their points.
What Can Users Do With Tokens?
First and foremost, the biggest new feature that Reddit has launched is their ability to get a “Special Memebership” in each subreddit using community points.
This is different than “Reddit Premium” which works across all sections of Reddit.com to remove ads.
Instead, this membership is unique for each community.
The membership allows users to add badges to their username, use premium animated emojis, and embed gif responses in their comments (embedding any type of image has never previously been supported on Reddit — despite the fact that every Reddit user has a good stockpile of ‘reply-gifs”)
Once a user has a “Special Membership” they will also be able to purchase additional badges and icons using their tokens. These icons and badges are only available for members of the community.
Reddit users will also be able to partake in weighted polls that show the community sentiment on topics based on active users within a community. In these polls, users won’t be able to buy influence, because the voting is weighted based on how many tokens the user has earned over the lifetime of their Reddit account, and not based on how many tokens are in their wallet currently.
Reddit users will also now be able to tip other users, using their tokens to thank them for their hardwork and contributions to the subreddit — so instead of simply gilding a comment with a fictional currency, users can now reward contributors with a token they control.
But, since the tokens also exist on a blockchain, users are able to use them for other purposes as well. Anyone can integrate Reddit’s Community Points into their website, or buy, sell and trade them on exchanges.
What Does Reddit Mean By Value Capture?
Whenever the tokens are used for a membership, badges, icons, etc they are “burned” which is blockchain speak for destroyed.
In certain subreddits, users are able to buy memberships using their credit card, but when they do, Reddit will burn the equivalent number of tokens from their own holdings.
Which means the amount of tokens in circulation will always go down — and in turn the demand should go higher which will lead to a higher priced token.
This means that the tokens you hold for contributing to a community represent a portion of the value created their — and since some people find it valuable to take part in these communities, the tokens likely have some economic value as well. So they can be sold to users who haven’t earned as much but still want to take part in the community.
Reddit hopes that by aligning the interest of users, advertisers and Reddit Inc, it can in turn create a beautiful token driven utopia.