Reddit tokens rise when Ethereum Arbitrum launches

The central theses

  • MOON is up 500% this month as demand for Reddit community tokens grows.
  • The recent introduction of the token on Arbitrum has served as a bullish catalyst as it enables use across multiple dApps on Layer 2.
  • BRICKS, another Reddit token, rose this month.

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MOON, the community token of the r / CryptoCurrency subreddit, has seen explosive price movement after migrating to Arbitrum.

Reddit tokens soar in the Arbitrum news

Reddit tokens are in great demand.

Last week, Reddit announced it was migrating its ERC-20 reward tokens to Arbitrum, a popular Layer 2 scaling solution on Ethereum.

The migration affected MOON, the native ERC-20 token used as community points on / r / CryptoCurrency.

The token is rewarded monthly to users who provide high quality posts and comments. The tokens are automatically added to Reddit’s own Ethereum wallets on the Arbitrum network.

Before the arbitrum migration, MOON tokens were distributed via the Ethereum test network Rinkeby. They could be bridged from the testnet to the xDai sidechain and traded on HoneySwap. However, there was no direct integration with Ethereum and it had little value as it was a testnet token.

The introduction to Arbitrum means that MOON can be exchanged in quick transactions with minimal gas fees while taking advantage of the security of Ethereum. This also means that Reddit users can now use their tokens on dApps within the Arbitrum ecosystem and can more easily deposit them on the Ethereum mainnet.

The involvement in the Ethereum mainnet certainly increases the value of the MOON tokens. In that regard, the Arbitrum migration news has been incredibly optimistic for the token.

In the past month, the MOON price has risen by more than 500%, although the broader crypto market has remained largely unchanged. Currently, each MOON token is trading at $ 0.25, according to CoinGecko. The price has doubled in the last week.

Source: CoinGecko

An important point is that the price only applies to the old tokens that are traded on xDai as DEX support is not yet available on Arbitrum. Therefore, while MOON is showing bullish strength, one factor behind the rise could be the low level of trading liquidity on DEXs.

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Apart from the price promotions, MOON has seen an increase in acceptance over the past year. In July 2021, 26,443 r / CryptoCurrency users requested the token in their wallets, more than ten times the number since it was launched in May 2020.

While MOON is primarily used as a community reward token, it also has features of a meme coin. Due to its growing popularity on Reddit and its limited overall supply, some community members have referred to the token as a “superior memecoin” compared to crypto’s original meme currency, Dogecoin. They attribute this claim to MOON’s limited offer of 250 million tokens and acceptance within the largest cryptocurrency community on Reddit.

MOON isn’t the only ERC-20 Reddit token affected by the recent Arbitrum update. The other is BRICKS, which is used on the r / FortniteBR subreddit. It has also seen its price jump over 222% this month.

While Reddit tokens are still in their infancy, it is possible that they will find their way into arbitrum-based dApps in areas like DeFi, NFTs, and gaming.

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