The Side Effect of ERC-20 Standard in Social Media Platforms

With the advent of blockchain technology, Online Social Media are moving towards integrating blockchain-based reward systems into their platforms. A reward system could help fight the spread of fake news by giving economic rewards to the users who contribute the most to the growth of the platform. Reddit recently proposed the Reddit Community Points, a rewarding system implemented on top of the Ethereum and Gnosis blockchains. Content creators can gain ERC-20 tokens, based on the votes they receive. These community tokens, called DONUTS, should be spent inside the Reddit platform, however, ERC-20 tokens can be easily traded or exchanged outside the platform. In this paper, we propose a study concerning the side effect of implementing community tokens as ERC-20 tokens. The analysis takes DONUTS as a case study and shows that the vast majority of tokens are transferred to and from decentralised exchange services, showing that users are not in favour of keeping the earned tokens to be used on the Reddit ecosystem. We also highlight that users are interested in entering the speculative market of blockchain tokens.