Social media platform Reddit plans to drag the plug on its blockchain-based reward service Neighborhood Factors.
“The regulatory atmosphere has added to scalability limitations. Although the moderators and communities that supported Neighborhood Factors have been unimaginable companions, because it’s advanced, the product is now not set as much as scale,” Reddit wrote in a message reviewed by The Block.
“Transferring away from Factors permits us to spend money on merchandise that present worth to extra Redditors,” it added. “We’ve additionally launched, or are actively investing in, a number of merchandise that accomplish what the Neighborhood Factors program was geared toward.”
Reddit will sundown Neighborhood Factors by Nov. 8.
Reddit’s blockchain ambitions
Neighborhood Factors first launched in 2020 as a strategy to reward customers for constructive exercise in sure subreddits, equivalent to receiving a considerable amount of upvotes for a remark or publish, with the aim of augmenting consumer engagement and communities.
The factors customers earned have been ERC-20 tokens saved within the platform’s crypto pockets known as Reddit Vault. Redditors might then spend their Neighborhood Factors on perks equivalent to emojis or badges, after which the factors could be burned.
Although Neighborhood Factors launched on Ethereum, the service migrated to the Layer 2 Arbitrum Nova in August of 2022 to decrease transaction prices and enhance scalability, The Block beforehand reported.