Jesse Powell, co-founder of Kraken, has voiced concerns over Reddit’s decision to discontinue its blockchain-based reward service, Community Points. This move has resulted in a significant drop in the value of related tokens.
Reddit recently announced plans to end the Community Points beta by November 8, with no clear path of scaling it broadly across the platform. Regulatory issues were cited as a contributing factor to the decision.
In August, Kraken listed two Reddit community reward tokens, MOON and BRICK, which saw a sharp increase in their price. Following Reddit’s announcement, MOON reportedly dropped around 90%.
Powell, expressing his disagreement on Reddit, remarked that the social media platform “should at least offer a redemption path” and suggested alternatives such as convertible Karma points or special badges. He criticized Reddit for “destroying the value of the holdings while offering nothing in return”.
Reddit’s Community Points, launched in 2020, were ERC-20 tokens compatible with Ethereum, aimed at boosting user engagement. The tokens were stored in the Reddit Vault, and could be used for perks like emojis and badges. To address scalability issues, the service migrated from Ethereum to Layer 2 Arbitrum Nova in August 2022.
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