Reddit and FTX update blockchain-based “community points” to make rewards available to crypto newbies

Reddit users will now be able to buy Ethereum directly in the social media platform’s app thanks to a partnership with FTX, the giant crypto exchange announced on Tuesday.

The new partnership involves a product called FTX Pay, which allows merchants to accept both crypto and fiat — and in Reddit’s case, means users don’t have to leave the app to buy Ethereum.

The development may seem incremental, but it’s part of a broader push to combine Reddit and blockchain technology like crypto and NFT, which the company has increasingly adopted. In 2020, the company launched “community points” that give users in two subreddits the opportunity to earn blockchain rewards for submitting “quality posts and comments.”

The points determine a user’s reputation and are displayed next to their username. They can be used within subreddits to give users with more points increased influence in voting on how the group should be run or to purchase special memberships and rewards, among other things. The key is that the community points exist on the blockchain, and are fully owned by the users, leaving the door open for them to be used in other yet-to-be-developed applications, which would give the points more utility.

The partnership with FTX signals that Reddit wants to make community points more accessible to non-crypto natives. Using the community points means making a transaction on the blockchain, which requires users to use crypto, in this case Ethereum, to pay fees to the network to validate the transactions. For the average Reddit user, this process can be confusing, but through the FTX partnership, non-crypto-savvy customers can purchase the cryptocurrency they need to spend their “community points” directly through the Reddit app with dollars.

In this way, users can avoid confusion, which will facilitate the use of the community points feature. Reddit hasn’t confirmed when it will expand its community points program beyond the two subreddits it’s testing the feature in, but the FTX collaboration shows the company is serious about bringing in non-crypto native users. This could be beneficial for Reddit, but also for FTX.

“Reddit has over 400 million (monthly) active users, making this one of the largest consumer initiatives in the web3. On top of that, we’re always excited about the use of blockchain with deeply embedded utility, which is Community Points. Reddit users and communities will be able to become more empowered and open,” Amy Wu, head of FTX Ventures, said in an email.

The implications of expanding the community program to Reddit’s active daily users, which numbered 52 million in 2020, according to The Wall Street Journal, could be important for the crypto industry. Reddit said cryptocurrencies were the most viewed topic in 2021, meaning there is already interest among Reddit users in the technology. Reddit has already begun testing the feature in two of social media’s most popular communities, r/Cryptocurrency and r/FortNiteBR, which have more than seven million members between them.
Reddit’s latest foray into crypto is just the latest in a series of initiatives aimed at integrating the company more with Web3 technology. The company began accepting Bitcoin payments for its premium membership in 2013, before discontinuing the program in 2018. Following in Twitter’s footsteps, the company launched a marketplace in July where users can buy NFTs called “collectibles” to display as their profile pictures their.