Through a connection with FTX, the crypto exchange owned by billionaire Sam Bankman-Fried, Reddit now allows users to acquire Ethereum cryptocurrency on the network. FTX said in a news release that Reddit users may now utilize the company’s payment system, FTX Pay, to manage their blockchain-based community points.
In 2020, Reddit introduced community points as a mechanism to reward members for participating with a community. These points live on the Ethereum blockchain and are kept in the “Vault,” a user’s blockchain-based wallet that also contains the collectible NFT (non-fungible token) avatars released by Reddit last month.
Reddit shows a user’s community points next to their username as a measure of their reputation, but it also provides a variety of methods to utilize them, such as obtaining community-specific memberships, voting on decisions, rewarding platform founders, and sending suggestions. Right now, only users on two subreddits, r/Cryptocurrency, and r/ForniteBR, may use community points, but Reddit intends to extend it to more communities in the future.
However, since community points are stored on the Ethereum blockchain, users will suffer gas costs, or the cost of conducting an Ethereum blockchain transaction, while utilizing the points. According to Fortune, this entails paying a charge in Ethereum, which some users may not have or may not know how to get. Reddit’s cooperation with FTX will allow users to convert fiat cash (a country’s national currency, such as USD) to Ethereum to pay those fees, making community points more accessible to those who may not be familiar with cryptocurrency.
FTX’s Reddit integration may symbolize Bankman-bet Fried’s endurance of the meme stock phenomena that began on Reddit, in addition to making it simpler to acquire Ethereum on the site. Last year, activity on subreddits such as r/WallStreetBets helped boost GameStop stock to new highs.
Bankman-Fried declared a 7.6 percent ownership in Robinhood, the free trading platform popular among young investors, in May, and there is speculation that he may be interested in purchasing the firm. Last month, FTX made regular stock trading available to all customers in the United States.
