Communities are moving to blockchain

1M Ago

Communities are moving to blockchain

Arbitrum, a L2 scaling solution for Ethereum, recently launched Arbitrum Nova which is a blockchain specifically designed for games and social applications. Arbitrum’s new chain enables ultra-low transaction fees, high transaction volumes, while it guarantees strong security due to AnyTrust technology.

Shortly after the official introduction of Arbitrum Nova, Reddit announced that they’re deploying Community Points system to Nova chain. With this move, Ethereum ecosystem got a chance to gain a huge number of new users because Reddit could potentially onboard their 400 million active monthly users into the blockchain world.

Future of Communities

Reddit came up with the idea of Community Points system in 2020 and then to implement the project they started working with Offchain Lab, the team behind Arbitrum. Reddit’s intention is to create a better future for online communities by giving back ownership and control. They believe that communities will be truly independent from platforms, if they are owned by their members in ways that platforms cannot take away. In 2022 the time came for the idea to be realized because the technology is already available to put the power in hands of communities.

Reddit’s Community Points System Community Points System

Points can be earned through contribution to the community, like creating content and moderating a group. This way, active engagement and better content creation are incentivized.

Community Points represent ownership and give the right to owners to vote on issues that determine the future of the community. In addition to the governance function, they can be used for unlocking premium features and moderation.

Points are displayed next to usernames, so the top contributors can be easily recognized by the members.

The Community Points system was invented to be a flexible tool that communities can shape to their needs. Each community has its own Points (token) that it can customize with its own name, symbol, distribution rules, burning mechanism and use cases.

Reddit Vault

Reddit developed a Vault, a digital wallet where Community Points can be stored. When you create your own Vault, you will receive a public key that belongs to an address on Arbitrum Nova chain where your Points are stored.

In order to move Community Points on chain, users need to pay for gas fees in ETH that they can purchase with bank card via FTX Pay which is directly integrated into Reddit Vault.

Within the Vault users are able to tip and gift tokens to other community members, but tokens cannot be directly transferred to blockchain addresses.

Moon and Brick Ecosystems

So far, two Reddit communities, r/CryptoCurrency and r/FortniteRB, have launched their Points systems on Arbitrum Nova. Each community has its own ERC-20 token, which represents the Community Points. Moon tokens were distributed to members in CryptoCurrency subreddit, while the members in FortniteRB subreddit got Brick tokens as rewards for their contributions

Since the migration to Nova chain, 167,000 wallets have been created in the Moon ecosystem and 88,000 wallets in the Brick ecosystem.

Members of Cryptocurrency group are able to earn Moon tokens for their contributions and get ownership in the community. Moons are distributed every 28 days based on users’ contribution during this period.

Initially 50 million Moons were distributed to members based on their earned points prior the launch of Community Points system on testnet. After the initial distribution, the Moons issuance began in June 2020 with a fixed 5 million monthly amount that decreases by 2,5% each month. In long-term the Moons distribution will reach a steady state where the total supply grows at 1% per year. At the time of writing this article the total supply from Moon tokens is 99,995,319.

Moons are burned when users buy premium membership or redeem Moons for Reddit coins. However, the burning mechanism can be changed in form of governance polls by the community.

In the documentation of Brick ecosystem, there is not much information about tokenomics. It’s only known that the total supply is 92,486,377 Brick tokens.

Outside of Reddit

The main use case of Community Points is to vote on issues affecting the community. However, Community Points live on a public blockchain, so people can use their points anywhere on the internet where points are supported. One such example is SushiSwap, which is already operating on Abritrum Nova, and makes it possible for users to swap their Moon or Brick tokens for ETH or stablecoins.

Swapping Moons on SushiSwap Conclusion

With the partnership of Reddit and Arbitrum, we can see a new paradigm in bringing social communities on-chain that gives a higher level of sovereignty and a new operating model to communities.

Reddit’s strategic move is a win-win situation for all participants. The Community Points system will result better quality content and increase the activity on the platform. Users will get ownership in their communities in exchange for their contributions. The Ethereum ecosystem should be also mentioned because they could gain millions of new users.

The current event also indicates that crypto is going mainstream, because tech giants like Meta and Reddit realized the potential in blockchain technology so they started to integrate it into their infrastructure.

Perhaps we are seeing the beginning of a new trend when platforms with huge user base serve as a bridge between crypto and people because with proper tools and good user experience, they will make it easy for people to get familiar with blockchains.