Reddit enlisted FTX and Arbitrum to launch its tokens on Ethereum. Users now can move Reddit’s Community Points to Arbitrum-built Ethereum wallets and pay gas fees with FTX Pay. Last month, top forum contributors earned up to $340 in Community Points tokens for posting in the r/cryptocurrency subreddit.
Despite the bear market, FTX is continuing on a massive buying spree, signing a new deal with Reddit.
FTX Pay, the crypto-to-fiat exchange platform, is integrating with Reddit and Arbitrum to allow users to pay gas fees on Reddit’s “Community Points” tokens using fiat. Rolled out in 2020, Community Points are blockchain-based Reddit tokens that allow users to divvy out rewards and interact with the social platform.
Reddit is a popular platform for retail crypto investors, as crypto was the platform’s most-viewed topic in 2021. In July 2021, the roll-up solution Arbitrum won a contest to build an Ethereum roll-up for Community Points, and now the roll-up is launching on Ethereum’s mainnet, as the company said in a statement on August 9.
“We’re excited to partner with Reddit to continue their work to empower online communities to harness the power of blockchain,” Sam Bankman-Fried, FTX’s CEO, said in a statement. “FTX Pay’s payment and exchange infrastructure integrates with Reddit Community Points, making the customer experience a more seamless process.”
Community Points allow subreddits to reward active members or make governance decisions.
Like all layer-2 solutions, Community Points transactions are settled on Ethereum, and Reddit enlisted the FTX to let users pay Ethereum’s transaction fees using fiat.
“Users need ETH for gas fees to transact with their Community Points on-chain, and FTX Pay allows them to do that,” head of FTX Ventures Amy Wu stated.
Currently, Community Points are only available in the r/cryptocurrency and r/fortnite subreddits, though Reddit has a waitlist. Similar to how users receive “Karma” for upvoted posts, Reddit airdrops reward active users.
“We have the entire rollup and security mechanism built out, but we also allow for others to develop in this ecosystem,” Steven Goldfeder, CEO of Offchain Labs, the developer behind Arbitrum, told Blockworks. “It’s not just Reddit launching Community Points. Others can tap into that. For example, a game developer can go ahead and say, ‘I’m launching a game, and the currency in my game are these Reddit Community Points.’”
Reddit’s crypto integration marks the latest instance of a Web2 company buying into Web3 technology, following recent Instagram’s expansion of its NFT integration.
“Reddit has a massive community. How do you get a billion users on blockchain? It’s by tapping into these existing communities and bringing them to the blockchain,” Goldfeder noted.