Reddit is reportedly phasing out its blockchain-based Community Points system in early November — roughly after three years — to prioritize other rewards programs that are easier to scale.

“Though we saw some future opportunities for Community Points, the resourcing needed was unfortunately too high to justify,” Tim Rathschmidt, director of consumer and product communications at Reddit, told TechCrunch. “The regulatory environment has since added to that effort.”

Rathschmidt explained that while Reddit appreciates its moderators and communities for supporting the product, the system has evolved into something that is no longer viable to scale.

Reddit’s Community Points first launched in 2020 with the aim of enabling users to earn rewards in the form of ERC-20 tokens based on the Ethereum blockchain for creating engaging content on the platform. However, the move to use a network notoriously known for high transaction fees and limited bandwidth proved a challenge for the discussion platform.

“Putting all Reddit users on the main Ethereum network, for example, would be infeasible and prohibitively expensive,” the Community Points page said. “Therefore, we have researched heavily into solutions that are decentralized, secure, and yet highly scalable.”

Reddit moved Community Points to Arbitrum Nova in 2022, which is built on top of Ethereum.

Besides the blockchain-based Community Points, Reddit has also introduced other ways to improve community governance and enhance engagement. In recent months, the platform rolled out its Mod Helper Program, a rewards initiative for moderators, and Contributor Program, which both award fiat money by allowing eligible users to convert Reddit gold and karma into cash.

“We’re still working on ways to improve community governance and empower communities and contributions,” Rathschmidt reportedly said. “Part of why we’re moving past this product is that we’ve already launched, or are actively investing in, several products that accomplish what the Community Points program was trying to accomplish while being easier to adopt and understand.”

The news had an immediate impact on Reddit-based tokens. Moons (MOON), the native token of Reddit's r/CryptoCurrency community, plunged 85%, while Bricks (BRICK), a reward for contributions in the r/Fortnite subreddit, was down 67%. Donut (DONUT), the token that represents the community points of the r/ethtrader subreddit, decreased by 66%.

Community Points is not the only rewards program that Reddit has shuttered this year. In July, Reddit announced the end of its coin system, which allowed users to purchase Gold and other currency to award other users.