Reddit has announced it is winding down its Community Points program by early November, a move that has caused the associated MOON cryptocurrency to plunge over 90% in value.
Community Points were designed to incentivize engagement on Reddit by rewarding users with blockchain-based tokens. The points took the form of Ethereum-based assets and were stored in users’ Reddit Vault wallets.
Keypoints
- Reddit’s cryptocurrency MOON has plummeted 90% in value recently, dropping from around $0.65 to $0.05.
- This massive decline was triggered by Reddit’s announcement that it will be sunsetting the Community Points beta program by early November.
- The Community Points system was tied to MOON and a key source of demand and utility for the token. Discontinuing it has removed a major reason to hold MOON.
- Reddit cited scalability limitations and regulatory concerns as the reasons for ending Community Points.
- The community is upset by the move, feeling it has caused huge losses for investors.
The Community Points system was deeply intertwined with the MOON cryptocurrency. MOON served as the Community Points token on Reddit’s Rinkeby test network. This utility and integration provided significant value and demand for MOON.
According to recent trading data, MOON has crashed from highs around $0.65 to just $0.05 following Reddit’s announcement. The drastic 90% decline is a result of panic selling by investors, as trading volumes have spiked.
Reddit cited scalability and regulatory challenges as the primary reasons for discontinuing Community Points. The company claims the program proved too difficult to scale across its platform, while evolving regulations added further obstacles.
The Reddit community has reacted negatively to the move, feeling it unfairly destroys value held in MOON holdings. However, Reddit insists focusing on more scalable incentives, like its new Contributor Program, will benefit more users in the long run.
With Community Points being phased out entirely by November, users will no longer receive points or see existing balances. This removes the main source of utility for MOON, explaining its precipitous decline.
The fallout demonstrates the risks of relying too heavily on platform-specific crypto assets like MOON. Though innovative, the inherent value of such tokens is dependent on the ongoing support of the parent platform. Regulatory and business shifts can rapidly eliminate demand.
While only a handful of subreddits used Community Points, the program shutdown provides an important reminder of the volatility and uncertainty tied to platform-specific cryptocurrencies. It also showcases the power centralized platforms have over crypto utilities they directly control.
The post Thanks Reddit: MOON Price Collapses as Community Points Being Shut Down appeared first on Blockonomi.
October 18, 2023 at 05:14AM https://blockonomi.com from Blockonomi https://ift.tt/NygrHdE
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