Reddit's MOON Cryptocurrency Now Has Cash Value
A secondary market has emerged around Reddit's MOON cryptocurrency after the company started cashing the tokens for Reddit Coins.
- Reddit has introduced a way to trade its MOON token for Reddit coins, giving the token real-world value.
- Users can trade MOON for DAI via third-party exchanges, with current prices ranging from 5 to 10 cents.
- It's not clear whether the MOON token's value is sustainable.
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After introducing two community-specific cryptocurrencies, Reddit is now giving users a way to spend or cash out their tokens.
Reddit MOON Now Has Value
Reddit introduced crypto this spring by distributing MOON and BRICK tokens to its cryptocurrency and Fortnite communities. Until recently, there were no practical uses for these tokens. The coins were simply used to manage badges and reputation scores, similar to post and comment Karma on the website. Neither of these had monetary value.
However, Reddit introduced a new feature last week—the ability to turn MOON and BRICK tokens into Reddit Coins. Those coins are Reddit’s non-blockchain-based digital tokens, which provide access to Reddit’s premium features and can also be bought with U.S. dollars and other fiat currencies.
Because of its redeemability for Reddit’s premium currency, users are now willing to pay real money for the MOON token, which is being traded speculatively on various token swaps.
Converting MOON to DAI
Converting MOON to DAI stablecoins requires several steps due to the fact that the MOON token was built on Ethereum’s Rinkeby testnet. There are about 7,000 MOON holders, according to market statistics.
Though Reddit has always allowed the free trading of MOON tokens, it seems that the site did not intend the MOON token to have real tradeable value on exchanges. Nevertheless, it has done so by giving those coins utility and creating demand for those tokens. Now each MOON token is trading at about 9 cents on decentralized exchanges.
It is not clear whether current prices are sustainable. If users choose to sell off their MOON coins, or if Reddit eliminates uses for the coin, MOON’s value could quickly collapse. Furthermore, the regulatory risk that comes with distributing tokens with real monetary value could cause the social media site to slow down its cryptocurrency distribution schedule until the situation becomes clearer.