Group Factors (CPs) will likely be issued as ERC-20 tokens on Ethereum. Whereas Reddit formally said that they don’t have any clear utility, the present proposal appears to be like akin to a governance token, as they’ll allow voting inside particular person subreddits.
Reddit stands to make a big revenue because the agency will obtain 20% of all Group Factors.
How CPs are differentiated from Karma:
They are going to be created per subreddit whereas karma is Reddit-wide
CPs are publicly tradable on Ethereum
Solely factors which can be earned can be utilized in governance (e.g. subreddit voting) which prevents direct vote shopping for (there are potential oblique strategies for vote shopping for).
Along with accruing worth in an analogous method to COMP’s governance token, these tokens can have a burn mechanism and lowering provide, just like an trade token like BNB. Since Reddit makes income off of ads, there is a chance to raised monetize banner adverts through a revenue cut up with subreddits.
Maybe most intriguing is the potential to incentivize new social conduct. For instance, it’s doable to think about a future the place r/Wallstreebets turns into a personal buying and selling group that requires a membership to affix. Alternatively, new behaviors might come up, akin to retail merchants wagering “bull bucks” (not the precise token) on which shares will go up or down.