Reddit has announced that their community coins Moons and Bricks will be migrated to the Layer 2 solution Arbitrum for enhanced scalability.
— Arbitrum is live on mainnet! (@arbitrum) July 22, 2021
Community Coins will “show up in you Vault like Magic”
Reddit started experimenting with Community Coins in 2019. The simple idea was to give rewards in the form of ERC-20 tokens to users who post quality content. As a test case, the tokens Moon and Brick were rolled out on the subreddits r/Cryptocurrency and r/FortniteBR, but it soon turned out that the high transaction fees made microtransaction unfeasible.
Therefore, Reddit started the “Scaling Bake-Off”, inviting developers to propose scalability solutions, which would allow Redditors to effectively use their earned Community Coins, and to expand the rewards program to other subreddits. Now, the winning solution has been picked, and it’s the L2 network Arbitrum. The Reddit team commented on this breakthrough:
You’ll notice transactions happen much faster, and once you’ve created [an Arbitrum] Vault, you won’t have to keep claiming Moons/Bricks every month. They’ll just show up in your Vault like magic!
Reddit could be the Kickstarter Layer 2 needed
Thanks to the vibrant community of independent Ethereum developers, there is a plethora of Layer 2 scaling solutions for the largest smart contract platform, but so far, they are still lagging behind in adoption, compared to alternative Layer 1 blockchains like Binance Smart Chain.
During the peak of this year’s NFT hype, Polygon (MATIC) seemed like a strong contender to bring L2 to mainstream adoption, thanks to onboarding a multitude of NFT platforms and marketplaces. Reddit’s Community Coins could be a huge game changer, especially when these rewards expand beyond just two subreddits. Once Community Coins hit mass rollout, we could be talking about thousands of subreddits launching their own token and millions of users flocking to Ethereum’s second layer.
What is even more important, many of these Redditors would come into contact with cryptocurrencies for the first time. While this could be another driver for crypto adoption in general, the specific impact on Arbitrum would be much larger, and it could make the L2 network the go-to option for making transactions with Reddit Community Coins, other ERC-20 tokens, and Ether for many users.