The Community Points project

3 years ago Reddit, the popular social network with more than 55 million users, launched the Community Points project. Its goal was to reward the positive interactions between users in various communities. As Reddit users know very well, each upvote to posts and comments raises the user's "karma", while downvotes lower it. Since 2020, many different Community Points were born: Donut, Brick and many others, based on the Ethereum blockchain; these token were saved in a legit ethereum wallet, accessible from the app, with the name Vault. Having its own seed phrase, though, it can also easily be imported in Metamask for example, as any other wallet.

The first problem with these blockchain-based tokens was transaction fees, that we all know are extremely expensive, and this led to the decision to move the tokens on the cheaper L2 solution Arbitrum Nova in 2022.

One of the most active communities on Reddit is r/CryptoCurrency, that of course has its own Community Points token, called Moons. This token gained lots of attention in 2023, and it managed to reach an ATH value of 0.51$ in september.

The r/CryptoCurrency subreddit became even more popular, and hundreds of people joined everyday to post and comment to earn Moons. With just 10 or 20 comments everyday it was easily possible to earn hundreds of token each month, and for someone it became a proper job. The raise of so-called "moon farmers" was a great source of debate in the subreddit: some users complained that this was lowering the post quality, and users even started to serially downvote other people's comments in order to lower their share of tokens, consequently raising their own.

Rise and fall

The sentiment was very bullish for Moons, with people believing they would easily reach 10$ in the next bull run; the Reddit management even discouraged the selling by reducing the earning amount if people sold more than 25% of their total tokens. Even more confidence was added when some CEX, including Kraken, listed the token, making it more easy for people to trade them outside of Uniswap. 

This went on until October 17th, when Reddit, with a post titled "Sunsetting Community Points Beta and Special Memberships", announced they will  to discontinue the Community Points by November 8th; many didn't even realize what that meant, but basically the Community Points will not be earned anymore in any community, and they will disappear from the Vault. The corporation explained that the project had "scalability issues" and that they wouldn't integrate well in the "improved reddit experience".

Right after the announcement, people started selling their token before they would become worthless, and this created a huge dump that brought Moons from 0.24$ of October 16th to a dismal 0.03$ (it recovered a little since then, but is it just a dead cat bounce?)

The future

So what's the future of Moons now? Community mods (that are volunteers and have nothing to do with Reddit staff) are determined to keep the Moons reward program alive: they are in talk with Reddit to take control of the Moons smart contract, that would enable them to distribute the monthly rewards directly. Another option would be to hard fork the token and provide the users with a 1:1 airdrop, but I think that this could create some problems, since the new token wouldn't be listed on the CEX for example.

Many users aren't convinced that this will help the token to stay alive though: in their opinion the success of the token was being backed by a big corporation like Reddit, and without that help it's condemned to die. I think that this is a cool project, but it showed all the flaws of being too centralized, and the risks of such a controlled environment, so maybe letting it in the hands of a more decentralized organization could benefit and it could eventually reach new highs with the help of the community.