A company changing its project outline for a year isn’t surprising, nor is laying off staff — except when that project was the one to give $5 million in equity back to Reddit’s fervent user base.
After promising to give its users a bit of the company (and tapping cryptocurrency as the vehicle to do the job), Reddit has appeared to change its mind about having the project on its agenda in 2015. The social site’s lead cryptoengineer, Ryan Charles, was let go last Thursday and all job openings for other cryptocurrency engineers have been removed from the job board as of Monday.
When Reddit raised a $50 million Series B round in September, it pledged to give 10 percent of it, or $5 million, back to its user base. The company had already hired Charles to be their lead engineer on the project, and its lead investor, Sam Altman, was excited about the experiment in distributing equity. Altman told me at the time that “You can in theory create a currency and have each coin be backed by one share of a company. Some day later, when the company goes public in the future, each coin can be traded for a share.”
In December, the project was officially launched as Reddit Notes. The vague details of the plan included awarding 950,000 Reddit Notes to users in a random lottery in Fall 2015. However, by letting go of the lead engineer who was working on that project, it’s hard to tell what the status of the project is now — and whether any Reddit Notes will make their way digitally into the hands of Reddit users this fall.
Reddit said Reddit Notes are still going to happen. Project manager Daniel Lim was not made available for comment, but the company said in a statement: “We will be issuing redditnotes; our research leads us to want to wait until the law and technology around cryptocurrency are further along before deciding exactly how. We want to make sure we can give the community the full value of the equity when they receive it in the future, and today we haven’t been able to find a way to do that within existing regulations.” (Those are the same words Reddit co-founder and chairman Alexis Ohanian said to Fortune and posted on Hacker News).
On Hacker News and Reddit, where Charles has been conducting Q&As, he also hinted that a larger plan to build a cryptofinancial system is now on the backburner: “The reddit wallet, should it have existed, had absolutely enormous potential. The goal was to make it really easy for redditors to have and transact in digital assets, particularly bitcoin, dogecoin, and reddit notes, as well as any other assets using whatever protocol we ultimately used for reddit notes (probably colored coins or sidechains). Consider the implications of making p2p payments possible on the world’s largest pseudonymous communication platform. It had the potential to play a large role in the global economy. It is a tragedy that this opportunity will now be missed (or at least substantially delayed).”