Thursday, September 21, 2023

Reddit partners with crypto exchange FTX to help users manage community points

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Reddit now allows users to buy Ethereum cryptocurrency on the platform through an integration with FTX, the crypto exchange owned by billionaire Sam Bankman-Fried. In a press releaseFTX announced that Reddit users can now use the company’s payment system, FTX Pay, to manage their blockchain based community points.

Reddit first rolled out community points in 2020 as a way to reward users for interacting with a community. These points exist on the Ethereum blockchain and are stored in the “Vault”, a user’s blockchain-based wallet that also contains the collectible NFT (non-fungible token) avatars that Reddit introduced last month.

Reddit displays a user’s community points alongside their username as a measure of their reputation, but also offers various ways to use them, such as getting community-specific memberships, voting on decisions, rewarding creators on the platform, and sending tips. Only the users on two subreddits, r/cryptocurrency and r/ForniteBR can use community points now, but Reddit plans to expand it to other communities in the future.

But because community points live on the Ethereum blockchain, users will have to pay gas fees, or the costs associated with conducting a transaction on the Ethereum blockchain, when using the points. As indicated by Fortune, this means paying a fee in Ethereum, which some users may not have, or may not know how to obtain. Reddit’s partnership with FTX allows users to convert fiat currency (a country’s national currency, such as USD) into Ethereum to cover those costs, which should make community points more accessible for people who may not know much about crypto.

“Users need Eth for gas charges to transact with their Points on-chain, and FTX Pay allows them to do that,” said Amy Wu, head of FTX Ventures, said in a tweet. “Reddit is a pioneer in harnessing the power of blockchain to enable online communities to own and control their communities. We are excited to support them and their users on this journey!”

In addition to making it easier to buy Ethereum on the platform, FTX’s Reddit integration may also represent Bankman-Fried’s commitment to the longevity of the meme stock phenomenon that has sprung up on Reddit. Last year, activity on subreddits like r/WallStreetBets helped propel GameStop stocks to unprecedented heights.

In May, Bankman-Fried announces 7.6 percent stake in Robinhood, the free trading platform popular with young investors and rumored to be considering acquiring the company. FTX also brought traditional stock trading to all users in the US last month.

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