Reddit allows users to purchase Ethereum cryptocurrency on the platform via integration with FTX, the crypto exchange owned by billionaire Sam Bankman-Fried. In a press release, FTX advised that Reddit users can now use the firm’s payment system, FTX Pay when handling their blockchain-based community attributes.
Reddit first moved out community points in 2020 to reward users for integrating with a community. These points live on the Ethereum blockchain and are stored in the “Vault,” a user’s blockchain-based wallet that maintains the collectible NFT (non-fungible token) avatars Reddit introduced last month.
To measure their reputation, Reddit displays a user’s community points next to their username. It 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/ForniteBR, and r/Cryptocurrency, can now operate community points, but Reddit plans to boost it to other communities.
Community points carry on the Ethereum blockchain; users will incur gas fees or the cost associated with executing a transaction on the Ethereum blockchain when using the facts. As pointed out by Fortune, this suggests paying the price in Ethereum, which some users may not have or may not understand how to obtain. Reddit’s collaboration with FTX will allow users to convert fiat currency to Ethereum to cover those costs, making community points more available to people who might not understand much about crypto.
“Users require Eth for gas fees to transact with their Points on-chain, and FTX Pay authorizes them to do that,” Amy Wu, the chief of FTX Ventures, said in a tweet. “Reddit is a frontiersperson in harnessing the power of blockchain to delegate online communities to own and manage their communities. We’re enthusiastic about supporting them and their users on this trip!”
Besides making it more comfortable to purchase Ethereum on the platform, FTX’s Reddit integration could also indicate Bankman-Fried’s bet on the longevity of the meme stock phenomenon instituted on Reddit. Last year, activity on subreddits like r/WallStreetBets, helped propel the GameStop stock to unprecedented heights.
In May, Bankman-Fried disclosed a 7.6 percent stake in Robinhood, the free trading platform popular among young investors. Talks have it that he may be peeking into obtaining the company. FTX also brought standard stock trading to all users in the US last month.
Reddit is an American social information aggregation, content rating, and dialogue website. Registered users “Redditors” submit content to the site, such as links, text posts, images, and videos, voted up or down by other members. Posts are categorized by subject into user-created boards dubbed “communities” or “subreddits.” Submissions with more upvotes seem towards the top of their subreddit and, if they obtain enough upvotes, finally on the site’s front page. Reddit administrators reconcile the communities. Moderation is also steered by community-specific moderators who are not Reddit workers.
Reddit was launched by University of Virginia roommates Steve Huffman and Alexis Ohanian, with Aaron Swartz, in 2005. Condé Nast Publications earned the site in October 2006. In 2011, Reddit became an autonomous subsidiary of Condé Nast’s parent company, Advance Publications. In October 2014, Reddit inflated $50 million in a funding round led by Sam Altman, including investors Marc Andreessen, Snoop Dogg, Peter Thiel, Ron Conway, and Jared Leto. Their investment cherished the company at $500 million then. In July 2017, Reddit grew by $200 million for a $1.8 billion valuation, with Advance Publications remaining the majority stakeholder. The company reportedly filed for an IPO in December of 2021 with a valuation of 15 billion dollars.
Reddit’s idea and initial development originated when college roommates Steve Huffman and Alexis Ohanian 2005. Huffman and Ohanian attended a talk by programmer-entrepreneur Paul Graham in Boston, Massachusetts, during their spring break from the University of Virginia. After talking with Huffman and Ohanian following the course, Graham invited the two to apply to his startup incubator Y Combinator. Their formal idea, My Mobile Menu, was unsuccessful and was planned to allow users to order food by SMS text messaging. However, during a brainstorming session to pitch another startup, the concept was created for what Graham named the “front page of the Internet.” For this view, Huffman and Ohanian were accepted into Y Combinator’s first class.
The team extended to include Christopher Slowe in November 2005. Between November 2005 and January 2006, Reddit linked with Aaron Swartz’s company Infogami. Swartz became an equal proprietor of the resulting parent company, Not A Bug. Ohanian later documented that instead of tagging Swartz as a co-founder, the proper description is that Reddit contracted Swartz’s company for six months after he and Huffman had begun. Huffman and Ohanian marketed Reddit to Condé Nast Publications, proprietor of Wired, on October 31, 2006, for a documented $10 million to $20 million, and the team proceeded to San Francisco. In November 2006, Swartz blogged whining about the new corporate environment, criticizing its level of productivity. In January 2007, Swartz was sacked for undisclosed reasons.
Reddit launched two additional modes of advertising on the site in 2009. First, the company launched sponsored content and a self-serve ads platform that year. Second, Reddit launched its Gold benefits program in July 2010, offering new features to editors and creating a frsh revenue stream for the company that did not rely on banner ads. On September 6, 2011, Reddit evolved operationally independent of Condé Nast, operating as a distinct subsidiary of its parent company, Advance Publications. Reddit and other websites experienced a 12-hour sitewide blackout on January 18, 2012, in protest of the Stop Online Piracy Act. In May 2012, Reddit joined the Internet Defense League, a group to organize future protests.