The Social News giant Reddit just shared big updates to their community points system. The website partnered with FTX, a cryptocurrency exchange and trading platform where users can trade using various strategies.
The collaboration between Reddit and FTX promises to monetize the website’s community points to Ethereum-based currency.
The integration of FTX Pay, FTX’s payment platform, will allow Reddit users to exchange cryptocurrencies to unlock new features for the website’s community points.
“Community points” is a system implemented by Reddit in 2020. In it, users can reward each other for social interactions on the platform. These points are stored in the “Vault”, an Ethereum blockchain-based wallet that also integrates Reddit’s collection of NFT avatars.
Now, the website that counts with more than 430 million users and over 130.000 active communities will be able to integrate its community points into the Ethereum Blockchain.
However, as of right now, only the subreddits r/Cryptocurrency and r/ForntniteBR will be able to use these community points.
Since these points are Ethereum-based, users will have to deal with the usual cryptocurrency transaction costs, known as gas fees. Given that not all users have Ethereum, this posed a problem for Reddit.
With the FTX collaboration, Reddit users will now be able to use the FTX Pay platform to convert whatever their country’s currency is into Ethereum.
The head of FTX’s Ventures, M&A, and gaming initiatives, Amy Wu celebrated the partnership.
“We believe that the best web3 products have thoughtful utility. Reddit Community Points represent reputation in the community.” Said Wu in a Tweet. “Users can take their reputation anywhere they want on the Internet.”
Why this collaboration might affect the Ethereum market
This is great news for crypto-investors and traders holding Ethereum. Since Reddit has millions of users under its banner, traders are expecting to see a significant change in Ethereum value in the next couple of days.
Day traders are expecting a serious surge and already putting their best chart analyzing tools to work in order to profit.
Methods such as the Wyckoff trading strategy are being mastered during current times because of the level of opportunity expected to come. The most optimistic traders are expecting a “flippening of the Ethereum price to a more bullish market.
Reddit has been involved with Crypto in the past
This is not the first time Reddit dabbles with Cryptocurrencies. A few years ago the company started accepting Bitcoin payments for the purchase of their exclusive membership “Reddit Gold. However, the company discontinued that payment option in 2018.
The website’s co-founder, Alexis Ohanian has been involved in cryptocurrencies for a long time. For instance, Ohanian launched a web3 investment fund worth $100 million dollars in 2021.
Reddit is perhaps the most famous website where traders and cryptocurrency enthusiasts meet. The platform has several communities revolving around the subject like r/Forex, where users share Forex trading techniques, r/Ethereum, and r/Bitcoin revolve around news about the company, and r/Wyckoff, a community where users share information about the Wyckoff trading strategy.
Most notably, the community r/WallStreetBets revolutionized the stock market in 2020. Redditors banded together to collectively buy the then dying Gamestop stock (GME), in order to save the beloved gaming company from going bankrupt.
This collective effort skyrocketed the stock from being worth $1.35 dollars on August 20th to reaching a whooping $81.25 dollars in January of 2021.
That’s when the concept of a “meme stock” was created. A meme stock is a stock with no particular value to the market, except for the sentimental value from a group of online investors, such as r/WallStreetBets.
Other examples of companies that had their stock traded as a “meme stock” from Redditors are AMC, Bed Bath & Beyond, National Beverage, and Koss.
Bankman-Fried’s increased interest in “meme stocks”.
“Meme stock” traders will often exclusively trade via RobinHood, a trading platform with minimal to no commission on its trades.
Perhaps FTX’s SEO Sam Bankman-Fried sees in meme stocks something that the rest of the market disregards as just “childish traders flooding the market”.
The millionaire recently acquired a 7.6% stake in Robinhood, buying 56,273,469 shares in an acquisition valued at nearly $648.3 million dollars.
Now, Bankman-Fried announced a partnership with Reddit, the home of the meme stock.
Now Redditors will be able to not only affect the market stock but trade cryptocurrencies between them on the Reddit community points platform.