Reddit now lets users purchase Ethereum cryptocurrency on the platform through an integration with FTX, the crypto exchange owned by billionaire Sam Bankman-Fried. In a press release, FTX announced that Reddit users can now use the firm’s payment system, FTX Pay, when managing their blockchain-based community points.
Reddit first rolled out community points in 2020 as a way to reward users for interacting with a community. These points exist on the Ethereum blockchain and are stored in the “Vault,” a user’s blockchain-based wallet that also holds the collectible NFT (non-fungible token) avatars that Reddit introduced last month.
Reddit displays a user’s community points next to their username as a measure of their reputation, but also offers various ways to use them, such as to get community-specific memberships, vote on decisions, reward creators on the platform, as well as send tips. Only the users on two subreddits, r/Cryptocurrency and r/ForniteBR can utilize community points right now, but Reddit plans on expanding it to other communities in the future.
But because community points live on the Ethereum blockchain, users will incur gas fees, or the cost associated with performing a transaction on the Ethereum blockchain, when using the points. As pointed out by Fortune, this means paying a fee in Ethereum, which some users may not have, or may not know how to go about obtaining. Reddit’s partnership with FTX will let users convert fiat currency (a country’s national currency, like USD) to Ethereum to cover those costs, which should make community points more accessible to people who might not know much about crypto.
“Users need Eth for gas fees to transact with their Points on-chain, and FTX Pay allows them to do that,” Amy Wu, the head of FTX Ventures, said in a tweet. “Reddit is a pioneer in harnessing the power of blockchain to empower online communities to own and control their communities. We’re excited to support them and their users on this journey!”
Besides making it easier to purchase Ethereum on the platform, FTX’s Reddit integration could also represent Bankman-Fried’s bet on the longevity of the meme stock phenomenon that originated on Reddit. Last year, activity on subreddits, like r/WallStreetBets, helped propel the GameStop stock to unprecedented heights.
In May, Bankman-Fried disclosed a 7.6 percent stake in Robinhood, the free trading platform popular among young investors, and rumor has it that he may be looking into acquiring the company. FTX also brought traditional stock trading to all users in the US last month.
wazup.