Reddit's spokesperson, Tim Rathschmidt, announced on Wednesday that the company will end its Community Points program by November 2023 due to its resource-intensive nature and complex regulatory environment. The announcement was made during an interview with TechCrunch.
The Community Points program, which rewarded users with Ethereum-based ERC-20 tokens MOON, BRICK, and DONUT, saw a significant devaluation following the announcement. The MOON token dropped by over 85%, BRICKS by more than 50%, and DONUT nearly 48%. This severe depreciation in value resulted in substantial investor losses and sparked speculation about a potential rug pull.
A rug pull is a fraudulent practice within the cryptocurrency community where developers abandon their projects, leading to sudden crashes in the value of related cryptocurrencies. This situation has been highlighted by blockchain security expert Jameson Lopp, who cited a Reddit user who lost thousands of dollars due to the crash.
The termination of Reddit's Community Points program underscores the challenges faced by social media platforms in managing cryptocurrency reward systems amidst a complex regulatory landscape. As the November deadline approaches, users and investors are urged to monitor the situation closely.
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