Reddit and FTX update "community points" to make crypto rewards accessible to beginners
Thanks to the latest partnership with FTX, Reddit users will now be able to buy Ethereum directly in the social media platform's app, the giant crypto exchange announced Tuesday.
The new collaboration involves a product called FTX Pay, which allows merchants to accept both crypto and fiat—in Reddit's case, this means users won't have to leave the app to purchase Ethereum.
The advancement may appear minor, but it is part of a larger effort to combine Reddit and blockchain technology such as crypto and NFTs, which the company has increasingly adopted. The company launched "community points" in 2020, allowing users in two subreddits to earn blockchain rewards for submitting "quality posts and comments."
The points, which appear next to the username, determine a user's reputation. They can be used within subreddits to give users with more points more influence in polls about how the group should be run, as well as to purchase special memberships and rewards. The key point is that the community points exist on the blockchain and are fully owned by the users, allowing them to be used in other yet-to-be-developed applications, giving the points greater utility.
Reddit deep dives into web3
The collaboration with FTX indicates that Reddit wants to make community points more accessible to non-crypto natives. Using community points entails performing a transaction on the blockchain, which necessitates users spending crypto, in this case, Ethereum, to pay network fees to validate the transactions. This process may be confusing to the average Reddit user, but thanks to the FTX partnership, non-crypto-savvy customers can buy the cryptocurrency they need to use their "community points" directly through the Reddit app with dollars.
Users will be less confused as a result, making the community points feature easier to adopt. Reddit has not confirmed when the community points program will be expanded beyond the two subreddits where it is currently being tested, but the FTX partnership demonstrates that the company is serious about onboarding non-crypto native users. This could be advantageous not only for Reddit, but also for FTX.
"Reddit has over 400 million (monthly) active users, making it one of the largest consumer initiatives in Web3." Furthermore, we are always excited about blockchain applications with deeply embedded utility, such as Community Points. "Reddit users and communities will be more empowered and open," said Amy Wu, CEO of FTX Ventures, in an email.
According to the Wall Street Journal, the implications of expanding the community points program to Reddit's 52 million active daily users in 2020 could be significant for the crypto industry. According to Reddit, cryptocurrencies were the most viewed topic in 2021, indicating that the technology is already popular among Reddit users. Reddit has already begun testing the feature in two of its most popular communities, r/Cryptocurrency and r/FortNiteBR, which have over seven million members each.
Reddit's latest foray into cryptocurrency is just the latest in a series of initiatives aimed at better integrating the company with Web3 technology. In 2013, the company began accepting Bitcoin payments for its premium membership, but the program was discontinued in 2018. Following in the footsteps of Twitter, the company launched a marketplace in July where users can purchase NFTs known as "collectibles" to use as profile pictures.