Technology

Likely only Reddit can say. I don't think Reddit was ever trying to make money off Community Points directly (in contrast to their NFTs), but rather to boost engagement. Whether or not it did, and by enough to offset the costs of starting and maintaining the system, we'll likely never know.

The belief amongst some is that reddit basically did a rug pull. People could and would buy these crypto points with real money, so reddit likely made money. Odds are it just was not successful outside of niche subreddits, hence:

Its newer Contributor Program, which rewards users with actual money from the Reddit gold and karma they accrue, is one such example. "Part of why we're moving past this product is that we've already launched, or are actively investing in, several products that accomplish what the Community Points program was trying to accomplish, while being easier to adopt and understand," Reddit’s director of consumer and product communications, Tim Rathschmidt, told TechCrunch.

Crypto also hopefully seems to be on the decline, and it's possible Reddit did not want to appear to be behind the times.

Reddit will not be forthcoming with that data regarding profitability. But they essentially gave the coins away to the communities to use as they saw fit. Reddit seemed to be angling to use it as an on-ramp for its NFT marketplace. The fact that the marketplace is sticking around, but not the community-based crypto, has me convinced that they are going to try this again but with an even more centralized token. Or maybe just with reddit gold/whatever they replace it with.

But this system did boost engagement on the subs. CryptoCurrency had to resort to heavy moderation because it boosted low effort engagement too much for people trying to make a quick buck. This is exactly what we see happening on reddit right now in the other subs as people try to get traction so they can make money off reddit's "revenue sharing" scheme they took directly from Elon.

Spez never was an original idea man. He implemented crypto and NFTs because everyone else was. He is on record saying that Elon is a great leader and he wants to emulate what he's doing with X. Hence, reddit copy/pasting X"s monetization strategy via tiered memberships with ads along with the potential to profit individually. I fully expect reddit to reverse course with an even more centralized token if that is what Elon does with X (or just use whichever token or coin that Spez happens to be heavily invested in, like Elon has floated several times with Doge).

The thing is: reddit can't really kill Moons. You can transfer them out of your Reddit vault and into your own wallet. There is an initiative on CryptoCurrency to get people to do that and just keep using Moons to fund and govern the community. Except, instead of reddit minting 1.2 million moons a month, the coins would instead become either static or deflationary. Rewards would be a fraction of what they are now but the Moons would theorhetically hold more value individually because no new Moons are being created.

I don't think Moons were ever a scam. They were a fun thing to encourage community engagement which included monthly governance votes to determine the policies and direction of the cryptocurrency subreddit. I can't think of any other community which was so self-governed right on down to which sponsors they would accept, what type of advertisements (if any) would be allowed, what types of posts, and even the rules. The mods are not the typical overbearing power trippers in general. Did Moons create that environment? I don't know. But it definitely incentivized people to stay engaged and vote. And it incentivized the mods to follow through.