While the Ethereum network is currently preparing for the first phase of its upgrade, the Ethereum community is witnessing a rip-roaring revolution, thanks to the implementation of ERC-20 tokens to the network, Reddit.
In the first weeks of April, speculations on the creation of a cryptocurrency token for Reddit trailed the cryptocurrency scenes as Reddit was rumored to have been working on rewarding its users with Cryptocurrencies. Yesterday, the internet was taken by storm when moderators took to the app to announce its integration ERC-20 tokens.
No Mining, No Staking, Just earn
Basically, users receive a moon token based on the number of karmas they earn. These moon tokens do not require that users engage in any form of mining or staking in order to generate rewards.
Users of Subreddits enabled with these tokens need only to stay active and contribute by commenting or creating posts in return for these tokens which will reward them with Community points; a fraction of ownership.
Ethereum could gain almost 20 million new users on the network
The adoption of ERC-20 tokens on an application like Reddit is a big win for the entire cryptocurrency community, especially Ethereum lovers. This is mainly because the r/CryptoCurrency and the /FortniteBRsubreddit, which are the only two communities that are soon to enjoy this feature, is home to nearly 20 million monthly visitors.
Not only will this propel a spike on Ethereum’s current 1.2 million wallet users, this is a pathway for users to learn about and possibly adopt cryptocurrencies in general.
Meanwhile, both communities have different stylizations for their community points. For the r/CryptoCurrency subreddit, the stylization is known as Moon, while r/FortniteBRsubreddit’s stylization is called Brick, both of which are available on the Vault section of Reddit’s App.
Tokens will be stored in subreddits and distributed amongst moderators as compensation. Tokens can also be earned and redeemed in the aforementioned subreddits. Tokens can be used to purchase exclusive features like loyalty badges, gifs, and colored usernames. And if you ever feel generous, you can tip tokens to any user of your choice.
The Economical Dynamics behind Reddit’s Tokens
Reddit has flirted with Cryptocurrencies from as far back as 2013 when the r/Cryptocurrency community was created. However, it didn’t seem like the American social news aggregation giant was ready to take a deep dive into digital currencies until recently. And right now, Reddit seems to have a decentralized agenda behind this recent adoption; a limited supply of tokens.
Yes, like Bitcoin, the moon token is structured to have a limited supply overtime. Upon its launch, 50 million tokens will be shared amongst eligible subreddits, and progressively, more and more tokens will go round until the token sits at a market cap of 250Million for every community. Therefore, supply reduces and demand increase, thereby maintaining its overall value.
This adoption is proof of the diverse use case that the Ethereum network possesses. Despite the many hurdles that the network is faced with, it is clear that its use case, even before attaining the scalability that is leading to its upgrade, is inherently valuable to the diversification of Blockchain applications.