Reddit will likely be phasing out its use of crypto-based Neighborhood Factors by early November. The choice to discontinue the rewards system little question comes as a shock to many customers who’ve embraced the expertise as a approach to earn and commerce digital belongings inside their favorite subreddits.

The MOON token – linked to r/CryptoCurrency – crashed 80% within the wake of the information.

In the meantime, r/FortNiteBR Bricks are down 35% after earlier dropping as a lot as 70%.

Reddit’s determination is pushed by a need to refocus its efforts and allocate sources towards different areas of growth, in response to TechCrunch. The blockchain-based Neighborhood Factors system was first launched in 2020 with the objective of giving customers a way of possession and worth inside Reddit communities.

Neighborhood Factors allow customers to earn and spend tokens for varied actions similar to posting high quality content material, partaking with the neighborhood, and performing moderator duties. These tokens have been initially saved on the Ethereum blockchain, permitting customers to commerce them exterior of Reddit.

Nonetheless, regardless of an preliminary wave of recognition and optimistic reception, issues over scalability and value have plagued the Neighborhood Factors system. The blockchain infrastructure required to help the rewards turned more and more burdensome, resulting in points with transaction throughput and excessive fuel charges.

The factors program migrated to Arbitrum Nova in 2022 to handle these challenges.

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A Reddit spokesman acknowledged the challenges confronted by the blockchain-based reward system and expressed gratitude to the early adopters who enthusiastically embraced the expertise. The corporate reassures customers that their present Neighborhood Factors is not going to be misplaced, and they are going to be supplied with steering on how you can convert the tokens to a different format sooner or later.

Reddit says it’s exploring other ways to supply partaking and rewarding experiences for customers inside its platform.