Reddit is replacing Karma for Ethereum-based Points in one of its communities. Here’s what you need to know. Reddit explains how its Ethereum-based Points system will work
More details have been revealed about Reddit’s blockchain-based points system, which it is trying for one of its communities.
As Decrypt reported yesterday, a community manager at Unstoppable Domains—which builds censorship-resistant websites—has been posting screenshots of a beta implementation of the new system. Today, he posted another update where Reddit reveals more information about the blockchain system, including that it will be running on Ethereum.
Reddit has confirmed that it is indeed working on such a system, but with only one community in mind.
“We continuously experiment with ways to support communities on Reddit. In this instance, we’re working with one community to test a feature that represents a user’s involvement in a community. We value and seek out community feedback as we continue to explore features that engage our users and communities,” a spokesperson said.
How will Reddit Ethereum Points work?
The new information reveals the purpose of the blockchain-based system. “Points are a measure of reputation and contribution within a community. To highlight the most important members of a community, points balances will be displayed next to usernames on posts and comments in the subreddit,” the FAQ explains, according to the screenshots.
In this way, Points work similarly to the current system of Karma, where users get free Karma when their posts are upvoted. But in this case, the points will have real value.
“Users can spend Points to buy Special Memberships in their community. A special membership unlocks exclusive features in the community,” it states, adding that this includes badges, animated emojis and GIFs.
It further states that when Points are spent, they will be destroyed. This is a tactic used by companies, such as Binance, in the hope that reducing the supply of the token will make its price go up. It seems like Reddit is thinking along the same lines.
“The points are destroyed (“burned”), making everyone else’s shares of Points go up. This ensures that buying memberships rewards the community as a whole,” it states.
The screenshots also show that the Points will be used for voting on Reddit. Votes can be run where each person gets one vote, or weighed proportionally to their number of Points.
How will users get Reddit Points?
Reddit Points will be distributed based on how much Karma a person has. And, similar to most ICOs, some of the Points will go to the builders. Reddit takes a 20% cut of new Points, and Reddit moderators get a 10% share.
The points will also have a similar economic policy to Bitcoin. The initial distribution will be 50 million Points, with another 50 million Points in the first year. Each year the number of new points will decline, converging to a maximum total of 250 Million Points.
While Reddit said that it is only working on this project with one community, that’s an awful lot of coins over a long timeframe for such a small subsection of the site. Is the plan part of something bigger?