Last week when Reddit announced it was sunsetting its blockchain-based Community Points program it stunned the r/cryptocurrency community as well as the other subreddits that had come to leverage this feature in a variety of ways. Many, including myself, were extremely caught off-guard by this move given Reddit's recent update to their Terms of Service. This update gave Community Points a monetary value and established Reddit Avartars as NFTs with tradeable/monetary value.
Since this announcement, I have not been on the r/cryptocurrency subreddit nearly as much but from what I have seen the number of active users has completely collapsed. Reddit in the flick of a wrist took all the good attention and backing of the Web3 community and destroyed it by destroying these projects/ecosystems that had emerged in recent months. While others might not have been as far along as r/cryptocurrency was with their moons they were still enjoyed by their respective subreddit.
When it comes to "blowing your foot off with a shotgun" as the saying goes Reddit really has emerged as the best in causing unnecessary damage and outrage to its brand and image. It hasn't been that long ago that they were navigating the API outrage and subsequent blackouts and r/cryptocurrency is/was one of their biggest subreddits clocking in at #68 ahead of common things like r/soccer and r/photography. Several other of these top 100 subreddits also used Community Points as well so who knows what effects that could have on those communities but it is not exactly going to spur more people to join and participate.
The reason for this change highly likely boils down to the same reason for the API changes and that is Reddit is looking to go public via an IPO and so they are doing everything they can to not only be more attractive to investors with their data but also get ahead of any possible regulatory issues. Once again we can thank the SEC and Gary Gensler for the sunsetting since no one knows what is going on with regulation and Congress is in a huge mess itself right now. What I find so surprising about this whole thing though is that NFTs do not have a great name right now whereas these Community Points were generating positive news for Reddit... Essentially they killed the one good thing for the bad thing that people are not huge fans of. We have seen the sales for the Reddit Avatars slow down and NFT collectors were likely in the r/cryptocurrency space so they hurt their main buyer.
At the rate that Reddit is going and with the stock market the mess it is right now the IPO that they aimed for the end of this year is likely not going to happen. Reddit has upset its base on such a large scale that it is hard to imagine that they push forward and essentially deal with their company debuting worth significantly less than it would have been at the beginning of this year. It is just bad business at the end of the day to consistently make headlines for the issues and outrage that you are causing yet Reddit continues to trek along and burn bridges.
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