Reddit is partnering with crypto exchange FTX to help users manage community points
Reddit now allows users to buy Ethereum cryptocurrency on the platform through an integration with FTX, the crypto exchange owned by billionaire Sam Bankman-Fried. In a press release, FTX announced that Reddit users can now use the company’s payment system, FTX Pay, when managing their blockchain-based community points.
Reddit first launched Community Points in 2020 as a way to reward users for interacting with a community. These points exist on the Ethereum blockchain and are stored in the “Vault,” a user’s blockchain-based wallet that also contains collectable NFT (non-fungible token) avatars that Reddit introduced last month.
Reddit displays a user’s Community Points next to their username as a measure of their reputation, but also offers various ways to use them, such as gaining community-specific memberships, voting on decisions, rewarding creators on the platform, as well as sending tips. Only the users of two subreddits, r/Cryptocurrency and r/ForniteBR can use Community Points right now, but Reddit plans to expand it to other communities in the future.
However, because Community Points reside on the Ethereum blockchain, users will incur gas fees, or the costs associated with performing a transaction on the Ethereum blockchain, when they spend the points. As pointed out by Fortune, this means paying a fee in Ethereum, which some users may not have, or may not know how to go about obtaining. Reddit’s partnership with FTX will allow users to convert fiat currency (a country’s national currency, like the USD) into Ethereum to cover these costs, which should make community points more accessible to people who may not know much about crypto.
“Users need Eth for gas fees to trade their points on-chain, and FTX Pay allows them to do that,” Amy Wu, head of FTX Ventures, said in a tweet. “Reddit is a pioneer in harnessing the power of blockchain to empower online communities to own and control their communities. We’re excited to support them and their users on this journey!”
Besides making it easier to buy Ethereum on the platform, FTX’s Reddit integration may also represent Bankman-Fried’s bet on the longevity of the meme-stock phenomenon that originated on Reddit. Last year, activity on subreddits, such as r/WallStreetBets, helped propel GameStop stock to unprecedented heights.
In May, Bankman-Fried disclosed a 7.6 percent stake in Robinhood, the free trading platform popular with young investors, and rumors say he may consider buying the company. FTX also brought traditional stock trading to all users in the US last month.
