Reddit ends its blockchain Community program, leads to MOON, BRICK & DONUT crashing

While the main attention of the crypto market is currently on the ongoing spot Bitcoin ETF approval saga, most missed out on what is going on with Reddit. The social media platform that became a part of the crypto community three years ago is shutting down its program, which resulted in significant crashes for its associated tokens.

Reddit shuts down the three-year-old program

Reddit Director of Consumer and Product Communications, Tim Rathschmidt, in an interview with TechCrunch, stated that the social media platform would be winding down Community Points. The program that started three years ago was set to be an incentive for rewarding creators and developers.

As part of this program, Ethereum-based ERC-20 tokens MOON, BRICK and DONUT were given out as rewards. MOON acted as the native asset of the crypto community on the platform; BRICKS was distributed as a rewards, and DONUT was also a native token of another subreddit.

Adding to the announcement, Rathschmidt noted,

“Though we saw some future opportunities for Community Points, the resourcing needed was unfortunately too high to justify. The regulatory environment has since added to that effort. Though the moderators and communities that supported Community Points have been incredible partners — as it’s evolved, the product is no longer set up to scale.”

The program is expected to be winded down gradually and come to an end completely by November 2023.

Reddit tokens crash and burn

The tokens associated with the social media platform faced a steep drop as their prices witnessed a free fall following the announcement. MOON price is currently down by more than 85% in the past 24 hours. Similarly, BRICKS has crashed by 50.65% while DONUT is noting a near 48% decline in its value in the same duration.

MOON, BRICK, DONUT 1-day chart

Even though the crash is closely associated with the Reddit program coming to an end, some considered it to be the result of a potential rug pull conducted by Reddit. A rug pull is a malicious maneuver in the cryptocurrency industry where developers abandon a project and run away with investors' funds. Blockchain security insight provider, Jameson Lopp, tweeted the picture of a comment stating the person lost thousands of dollars, captioning it rugged. 

Regardless of whether this was sarcastic in nature or sincere, the truth of the matter is that MOON, BRICK and DONUT holders are facing disastrous losses.