Reddit Users Can Now Buy Ethereum Via FTX
JAKARTA - Reddit is now allowing its users to buy Ethereum cryptocurrency on the platform through 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 company's payment system, FTX Pay, when managing their blockchain-based community points.
Reddit first launched community points in 2020 as a way to reward users for interacting with the community. These points are on the Ethereum blockchain and stored in “Vault,” a user blockchain-based wallet that also stores 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 they also offer a variety of ways to use them. For example, such as getting a special community membership, voting, rewarding creators on the platform, and sending tips.
Only users on the two subreddits, r/Cryptocurrency and r/ForniteBR can use community points at this time, but Reddit plans to expand it to other communities in the future.
But because community points live on the Ethereum blockchain, users will incur gas fees, or fees associated with making transactions on the Ethereum blockchain, when using points.
As Fortune points out, this means paying a fee in Ethereum, which some users may not have, or may not know how to get.
Reddit's partnership with FTX will allow users to convert fiat currency (a country's national currency, such as USD) to Ethereum to cover those fees, which should make community points more accessible to people who may 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,” said Amy Wu, head of FTX Ventures, in a tweet.
“Reddit is a pioneer in harnessing the power of blockchain to empower online communities to own and control their communities. We are happy to support them and their users on this journey!” he added.
Apart from making buying Ethereum on the platform easier, FTX's Reddit integration could also represent Bankman-Fried's gamble on the longevity of the stock meme phenomenon that originated on Reddit. Last year, activity on subreddits, such as r/WallStreetBets, helped to propel GameStop shares to unprecedented levels.
In May, Bankman-Fried disclosed a 7.6 percent stake in Robinhood, a free trading platform popular with young investors, and rumors have it that he might consider acquiring the company. FTX also brought traditional stock trading to all users in the US last month.