A portion of the $50 million funding that the company has raised from investments will be redistributed as shares to members of the Reddit community. This unprecedented move aims to recognize the importance of the community members to the website's success.
Reddit is thinking about developing its own cryptocurrency, backed up by company stocks. The information about distributing shares and further developing the community and brand was posted by Reddit CEO Yishan Wong on the official blog for Reddit.
"We're planning to use this money to hire more staff for product development, expand our community management team, build out better moderation and community tools, work more closely with third-party developers to expand our mobile offerings (try our new AMA app), improve our self-serve ad product, build out Redditgifts marketplace, pay for our growing technical infrastructure, and all the many other things it takes to support a huge and growing global Internet community," Wong wrote.
In addition to the plans for the future of Reddit, investors have also made pledges to return 10 percent of the shares they acquired to the Reddit community, which was detailed by Wong in the comments section of the blog post.
Creating the cryptocurrency, backing it up by Reddit shares and giving the currency to the members of the Reddit community has already been agreed to by the investors. The plan is something that has never been done before, and is a very complicated procedure with technical, legal and financial aspects. However, a consultation with a former lawyer of the SEC noted that there are no illegal actions that will be made by carrying out of the plan.
Wong admits that there are many things that need to be done to be able to complete the plan, but Reddit will try. However, should the plan fail, Reddit will think of another way to give back to the community that has made Reddit so successful.
Reddit delving into cryptocurrency development could mean that the company has plans to use it for more than just giving back to the community. A theory is that the cryptocurrency can be used to give coins as gifts to other Reddit users, and could also be used as payments for the developing Redditgifts service.
Funding was raised through a consortium of investors, which includes Y Combinator president Sam Altman, Sequioa Capital's Alfred Lin and Andreessen Horowitz's Marc Andreessen. Also included in the group are Ron Conway, Peter Thiel, Jared Leto, Paul Buchheit, Jessica Livingston, Julia and Kevin Hartx, Josh Kushner, Mariam Naficy, Yishan Wong and Snoop Dogg.