Blockchain Reward System: Reddit Case Study
Reward systems are one of the most flexible and efficient ways for brands to interact with their ambassadors. Incentives for feedback, cash back for purchases, personalized discounts, special offers and bonuses, access to premium functionality, reputation systems — and on the list goes.
It hardly comes as a surprise that social industry giant such as Reddit is implementing a blockchain reward system for self-regulated communities. Spearheading the innovation for one-and-a-half decades now, Reddit’s pick for a go-to tech is more than obvious. Fair, feature-rich, and cost-effective rewards are no easy task, though. Even for top-tier blockchains, which Ethereum — Reddit’s DLT of choice — most definitely is.
In its first year, Minter Network managed to solve the problem of putting reward systems on the blockchain in a painless, adjustable, and most optimized way. The Minter community has been focused on the rewards area for quite a while now, piloting various mechanisms to address the applicability and spending issues. Inspired by this recent post, the Minter community willingly invited Reddit to test a solution that would be built atop its blockchain. The goal was to demo how easy-to-use, reliable, and scalable a Minter-powered blockchain reward system could be. And to follow up on the community-authored open letter, today we’re taking a look at what would happen if Reddit actually integrated with Minter.
Community Points
What Minter and Reddit have in common is that they both strive toward a free Internet completely controlled by users: a dynamic world of diverse, successful, and independent on-line communities. By “communities,” we mean not only subreddits within a single Reddit platform but also individual brands whose users are dispersed across numerous platforms, social networks, corporate applications, etc.
Community points are a tool for interaction and value exchange between the users and the community as a stand-alone part of the larger platform. On the inside, points can be spent on premium features and used to measure reputation community-wide. On the outside, users can buy real-world items from stores that offer thousands of goods and services.
Community Points Mechanism
Users earn points by contributing to the community’s development, performing useful actions, and leaving high-quality comments. It’s the community that has the last word in deciding who gets how much. Based on whether or not the contributions are valuable, of course.
Once the user gets ahold of their points, they’re free to choose what to do next. They can start saving, for example, or jump right to the premium features, such as:
- Badges
- Animated emojis
- GIFs
But how will integrity and control be secured, you may ask? Being an open-source, decentralized ledger, the Minter blockchain will never allow strangers anywhere near your hard-earned points, or decide how to use them on your behalf, or keep you from using them in any way whatsoever.
Tips & Transfers
Users can transfer or gift their community points to one another. If someone’s come up with a great post or reply, you can tip them. Just click on the avatar and select the option from the menu.
Community points can also be sent to other redditors or to any address on the Minter blockchain.
Reputation and Votes
The balance displayed next to the user would give everyone a better understanding of the scope of the contribution that particular user has made to the community, increasing reputation transparency along the way.
Polls in community-points-enabled subreddits have two sets of results:
- The usual. One participant = one vote
- Weighted. Each earned point = one vote
The second one lets the community gauge the impact that participants of the poll have on its outcome.
How to make sure it’s fair play, then? The maximum weight carried by the user’s vote could be limited to the number of points they earned. We’ve specifically stressed the word “earned,” meaning any extra points (such as donations or incoming transfers) do not count.
Branded Coin for Each Subreddit
Community points are super customizable. Any subreddit is more than welcome to choose the name, appearance, parameters, and use cases that would fit their own community’s needs.
Creating branded subreddit points means creating a custom coin on the Minter blockchain. To do that, you don’t need to code up a smart contract or hire a fancy expert. One tap, and a unique coin of yours is already out there, serving as your community’s points. The creator independently sets the number of points to be issued or opts for one of the available templates. There are two types of points (coins):
Local. Can be spent within the subreddit they were issued for. Local points can be:
- Permanent. Ever-circulating, hands-changing, used all the time
- One-off. Can only be spent once. Suitable for various kinds of events (e.g., point = ticket). Once expired, can be archived and later re-issued under the same ticker
Global. Can be swapped for other global points or qualifying goods and services anywhere in the world. These can be:
- Limited. A limited number of points allows the creator to control their circulation and free purchase or sale on the secondary market. For example, the maximum number of points — say, 10 million — was issued at once. The user can get those only by performing useful actions on Reddit, no workarounds
- Unlimited. The number of points is infinite, meaning any user can buy or sell them even in external environments outside of Reddit (for example, from Minter’s native BIP Wallet)
Local
Local points essentially are a Minter network coin with finite supply and a constant reserve of 10,000 BIP. Such coins can’t be exchanged by standard conversion. This allows you to design any economic model in terms of a single brand, community, or subreddit, on your own terms.
One-off local points are great for events. Example: for the APPLE subreddit, a coin of the same name is created, which is distributed to the 100 most active (or karma’ed) users of this community to participate in the next product presentation. Once the event is finished, the coin is archived with the APPLE-1 ticker and re-created under the same name APPLE, but for the next event’s 200 participants. Any subsequent re-issuance is as easy as the very first one.
Global
Global points can be exchanged for a variety of values:
- Global points of other communities and brands
- Money (at the market rate)
- Goods and services
And if it’s all more or less clear in the money case (fiat, other cryptos, e-money, literally anything you can buy or sell for), then two remaining ones may be somewhat confusing. Let’s explore them in more detail.
Point Conversion
A feature that makes Minter blockchain stand out is that the coins created on the network are instantly liquid and exchangeable, requiring no involvement. Each custom coin is backed by the network’s native coin BIP. This means when someone buys a custom coin, they increase its reserve and vice versa. The same thing happens when exchanging custom coins. Without leaving the wallet (or Reddit interface), the user sells a coin available on their balance (reducing its reserve), automatically buying the other coin (increasing its reserve by the amount to which they reduced the first one).
Projecting this mechanism onto subreddit points gets us a blockchain reward system that allows you to quickly (five seconds) swap points of one community for those of the other.
Blockchain Rewards Turned into Goods and Services
Receiving global points in various subreddits allows users to spend them not only on Reddit but also to purchase goods and services IRL. Since all global points have a market price (they can be bought and sold outside of Reddit), you can use them for payments. Moreover, there is no need to negotiate with the seller or send points manually, worrying about the safety of funds and the merchant’s trustworthiness.
The Minter blockchain’s advantages and flexibility led to the arrival of an automated mechanism for exchanging and sending money (coins/points at the market price). Ladies and gentlemen, enter Minter Push.
Minter Push provides the ability to quickly send funds to someone who doesn’t even have to download a wallet or sign up anywhere. The receiver can spend the money on goods and services they need, provided connected shops offer them.
How fast is it, what do you think? From sending to spending, it’s one minute, tops:
At this moment, there are several Push services on the Minter blockchain. Each of them you can try out straight away:
Watch how simple it is to send coins (points) to someone who can then spend them on whatever they like:
There is no need for Reddit users to go beyond the platform (although there is such an option) to transform their points into XBOX or iTunes gift cards, certificates, games, mobile phone top-ups, and many more.
You can find all the spending options here.
Blockchain Rewards Program Aside, What Advantages Does Minter Bring to the Table?
What makes Minter a perfect blockchain reward system candidate for Reddit?
Scaling
The Minter blockchain’s scalability far exceeds current needs. Readiness for over 100M daily transactions is confirmed by the throughput of 100,000 transactions per block, generated every five seconds.
Multi-Sends
A multi-send transaction on the Minter network allows you to send multiple transfers from one wallet simultaneously. In one multi-send transaction, you can specify up to 100 receivers. Thus, in five seconds (one block), the funds you’ve sent reach 100 users.
Decentralization
Minter is a modern, fast, and multi-functional blockchain built on top of the DPoS (Delegated-Proof-of-Stake) consensus algorithm and the Tendermint engine under the hood.
The consensus model that underpins DPoS is decentralized, flexible, and highly efficient. It is driven by the votes of validators, ensuring the consensus is reached in a just and democratic way. Sixty-four independent masternodes currently validate the Minter blockchain.
Usability
Minter infrastructure allows end-users to forget about all the hurdles they usually stumble upon when working with blockchain:
- Transactions take less than five seconds to finalize, allowing you to manage the coins right now instead of waiting another 10 minutes or even a couple of hours for the confirmation by the network
- Minter has no gas. Super low transaction fees are paid with a native BIP coin or any custom coin available on balance. There’s no need to wander around, looking for additional funds or thinking how to pay a commission fee
- There are several UX-centric explorer services giving you all the necessary information about the balance status of any user (network address), transaction history, as well as the parameters and owners of the coins. Official explorer, Minterscan, Chainik
Development and Compatibility
- The blockchain itself is open-source, so are the majority of services based on it
- The integration of deposits and withdrawals of Minter coins into any platform is not rocket science. Here’s how you do it
- In-depth documentation
- No need to learn a brand new programming language (just go for GO) or have advanced knowledge of math, cryptography, or scaling
- A wide range of ready-made SDKs and a large dev community you can turn to whenever you have any questions or troubles
Safety
- The user is the sole owner of their funds, managing them at their own discretion
- The DPoS consensus algorithm and an obligatory two-thirds majority leave no room for transaction forging
Multi-Signatures
A multisig address requires several signatures for a transaction to go through. “Multisig” means access to the address is granted to more than one user. The Minter Console (web version of the wallet) embodies the interface for creating such addresses. Can be used in a number of scenarios — like this one.
