In its latest funding round, the chat community site pulled in an unasked-for $410 million as it seeks to scale it Community Points token initiative.
When a company like Fidelity comes calling with a wheelbarrow full of money, it's hard to avoid the conclusion that you’re doing something right.
That’s the position Reddit found itself in recently after the financial services giant approached it with another $410 million funding round — hard on the heels of the quarter-billion dollars it raised in February — upping its valuation to $10 billion and giving it more leeway in timing its planned IPO.
“Fidelity made us an offer that we couldn’t refuse,” the discussion community’s co-founder and CEO, Steve Huffman, told the New York Times on August 12. “We are still planning on going public, but we don’t have a firm timeline there yet.”
With 50 million daily visitors and $100 million in quarterly ad revenue, Reddit is booming. But the company that Huffman describes as having grown up “in the shadow of Facebook and Google” still needs to up its game to move up the ranks of the social media industry.
One of the ways it’s doing that is with its Ethereum-based cryptocurrency rewards program, Community Points.
While still limited to just a few of its 100,000-plus subreddit communities — r/CryptoCurrency, r/EthTrader and r/FortNiteBR — the company’s foray into cryptocurrency has a long way to go.
But it is pushing ahead, having announced in July that it had selected Arbitrum as the winner of its Scaling Bake-Off to choose a platform to grow Community Points throughout the subreddit ecosystem.
Offchain Labs’ Layer 2 solution launched its mainnet beta in May, and since then Arbitrum has been attracting some major DeFi protocol developers.
Monetizing Karma?
Redditors earn Community Points by contributing to their subreddits — notably by submitting high-quality, attention-grabbing posts and comments — that the company hopes will not only strengthen and expand its communities, but also act as an onboarding tool bringing more people to crypto in general and Ethereum in particular.
The 3.3 million-member r/CryptoCurrency community’s Community Points are called Moons, 1.6 million-member r/EthTrader’s are Donuts, and 1.6 million-member r/FortNiteBR’s are Bricks. All Community Points can be stored on the Reddit app’s Vault, and can be freely traded or used for a variety of purposes like tipping, awards, increasing voting power on community polls, and buying ad banners and spending on items unique to each community. And likely sold.
r/CryptoCurrency’s Moons had an initial distribution last year of 50 million tokens to existing users based on Karma, with monthly distributions thereafter starting at five million and decreasing by 2.5% each month until the subreddit hard cap of 250 million is reached.
