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Since integrating with FTX, the cryptocurrency exchange owned by billionaire Sam Bankman-Fried, Reddit users can now buy Ethereum cryptocurrency without leaving the platform. Reddit users can now use FTX’s payment system, FTX Pay, to keep track of their blockchain-based community points, the company announced in a press release.
In 2020, Reddit introduced community points as a way to reward users for contributing to a community. Reddit introduced collectible NFT (non-fungible token) avatars last month, and their corresponding points can be found on the Ethereum blockchain and kept in the “Vault,” a blockchain-based wallet.
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.
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