Thread by @NTmoney

Some early thoughts on @Reddit donuts...

A few weeks ago, donuts were created as “community points” on r/ethrader, where 204K+ subscribers discuss ETH news & price. Other subreddits were part of Reddit’s initial community points roll out: r/libertarian, r/stellar and r/mountainbiking

Community points are rewarded to users for their contributions to specific subreddits and give users voting power in polls and the ability to set the banner ad for the subreddit

A few weeks after the roll out, a community member built a bridge that connected community points and Ethereum: donut.dance

Donut.dance is a centralized bridge that turns community points into ERC20 tokens. Transfer donuts to a Reddit user who controls the bridge & they turn them into ERC20 tokens which can be traded on decentralized exchanges (e.g. @UniswapExchange)

Currently 1 ETH = ~29,653 donuts. The total market value for donuts is ~3,467 ETH (~$398,780)

I haven’t seen any great price charts for donuts yet, but here’s one attempt coingecko.com/en/coins/donut

Interestingly, the tokenization of community points was quite controversial within the r/ethtrader community. Many of the mods & donut whales argued against the tokenization of donuts and the donut.dance bridge was suspended indefinitely

The main argument against donut tokenization seemed to be that the community would turn into a plutocracy if anyone with a lot of capital can purchase a lot of voting power

Despite the early controversy, I think the interest and emotion this experiment has evoked is a strong signal that there’s a big idea here

There are 5000+ subreddits with hundreds of millions of people who are passionate about different topics. It’s likely that many are interested in monetizing their discussions. It’s also likely that Reddit is interested in a new way to monetize

How could Reddit monetize users from the tokenization of community points? Roll out community points across all subreddits, integrate a web3 wallet natively into user accounts, then build a DEX service and charge a fee when users want to convert community points to ETH or DAI

There are a lot of challenges here and it’s clearly not going to be for everyone, but this is the type of thing that could very quickly could unlock a lot of economic value & put web3 wallets into the hands of tens of millions of new people

Projecting the ~$398K mkt value of donuts out across the entire userbase of 330M+ monthly active users, there may be over $1B in economic value unlocked in Reddit communities presently and hundreds of millions of revenue in the form of trading fees for Reddit

This is Reddit’s opportunity to lose but open for others as well (both incumbent online community platforms and new startups)