Yesterday, Reddit admins announced their decision to halt native support for Community Points, a blockchain-based reward program that has been running for over three years. The decision was based on regulatory problems, which has led many users to question if Reddit’s NFT collectible avatars are also in jeopardy of being discontinued.
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Reddit is digging its own ditch
Following the controversial API changes implemented in July, which resulted in massive protests, Reddit has made yet another decision that resulted in community outrage.
The canceled Community Points were cultivated with significant input and hard work from both users and moderators. However, despite the effort invested, the platform’s administrators have chosen to terminate the project without offering a subsequent plan.
Originally, the project was introduced to Reddit users as a pathway to achieve autonomy from centralized control. However, critics argue that this move shows that Reddit was unable to stay committed to the very principles it had pledged to uphold.
Tokens plummet in minutes
The silver lining is that individual community moderators have the freedom to continue managing these projects on their own. For instance, the communities of r/CryptoCurrency and r/ethtrader can still utilize Moons and Donuts. But the fate of other tokens like bricks in the r/fortnite community remains uncertain.
Moons plummeted from $0.23 to $0.08 shortly after the news, ultimately reaching a low of $0.03, marking an 85% drop from its peak. Other tokens, such as Bricks and Donuts, experienced a decline ranging from 60% to 90% in value.
What about the NFTs?
Regrettably, the future looks bleak for the NFT avatar community. If Reddit withdraws its support for avatars, there isn’t a feasible way for them to be used on the platform. Though these avatars can be transported to other websites as profile images, this transition would strip them of the unique attributes that made them distinct on Reddit.
The former CEO of the Kraken cryptocurrency exchange weighed in on the controversy. He stated that they haven’t encountered the kind of regulatory pressures Reddit claims to be facing. Yet, it’s important to note that both avatars and tokens are categorized as crypto assets and are subject to similar fundamental regulatory challenges.
The underlying concern many users express is Reddit’s reliability when it comes to supporting any crypto-related endeavors in the long run. Their terms of service provide them with a carte blanche to discontinue support for avatars whenever they see fit, without any ensuing consequences. This leaves the avatar community in a tight spot, grappling with limited alternatives for independent avatar usage should Reddit choose to withdraw its backing.
For those contemplating collecting avatars, it’s worth reconsidering. Depending on their persistent availability on Reddit, it might not be a wise strategy moving forward.