In the past week, Reddit’s Community Points announcement has brought a significant amount of attention to the Ethereum and DeFi ecosystem.

With one of the most visited websites on the internet intending to launch an Ethereum-based product to millions of users across the globe, it should go without saying that there’s plenty of excitement circulating the community. Reddit’s new tokenized point system is beginning its testing featuring two major subreddits combining for well-over 2M subscribers – /r/cryptocurrency and /r/fortniteBR.

In case you missed it, Community Points are an Ethereum-based ERC20 token allowing Redditors to own a piece of their favorite communities. The points can be earned by contributing or participating in the subreddit while being able to be spent on premium features and used as a proxy for reputation in the community. These ERC20 tokens are distributed monthly based on the contributions people make and leverage Reddit’s Karma system to weigh the effects of these contributions.

These two subreddits create an interesting dynamic as one group is very much down the rabbit hole and has an understanding of the crypto space (/r/cryptocurrency) while the other is largely comprised of young adults who’ve grown up entirely in the digital age and are extremely familiar with digital economies (/r/fortniteBR).

The launch marked the beginning of Reddit Vaults, the website’s native wallet. Prospective Community Point owners can set up their Reddit Vault by downloading the mobile app and connecting their Reddit accounts. What’s interesting with the launch of these features is the resurgence in interest from the only subreddit that already has a native token – /r/EthTrader.

DONUTS Moon on Uniswap

For those unfamiliar, the Ethereum-based subreddit launched DONUT back in December 2019. Similar to Community Points, these ERC-20 tokens are distributed to active community members based on their monthly participation.

The difference? DONUTS are live on Ethereum mainnet while MOONS and BRICKS – /r/cryptocurrency’s and /r/fortniteBR’s tokens, respectively – are only on Ethereum’s testnet. With DONUT being the first unofficial iteration of Community Points live on main-net, the subreddit’s native asset can leverage the range of possibilities available with Ethereum’s composability and its surrounding DeFi products. To that end, DONUTS are currently trading on Uniswap with ~$5,500 in combined liquidity across V1 and V2.

With Community Points in the spotlight, /r/EthTrader is capitalizing on the exposure by launching a poll to cut DONUT issuance in half. With 82.9% of the community voting “yes” to halve the issuance, it’s very likely that the amount of DONUTS coming into circulation will follow-suit with Bitcoin’s recent issuance reduction.

The speculative halving for /r/EthTrader’s native token has resulted in the asset surging by 5x since the beginning of May as users flock to the token amid the scarcity increase. The interesting thing to outline is that given these communities and their underlying tokens are entirely decentralized and therefore governed by the community, there’s nothing stopping stakeholders from executing on issuance reductions in an effort to increase the price or the value of the underlying tokens.

With Community Points set to launch on Reddit in the coming future, it will be extremely interesting to see how each community decides to govern the underlying economics behind their respective tokens. The surge in asset prices for DONUT following an issuance reduction should at least highlight the potential for other keen Subreddit’s to take a similar path upon a full main net launch.

What’s more, is that we could even see Reddit specific DAOs arise for tokenholders. If nothing else, there’s never a dull day in crypto!

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