Lore

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In the beginning...

A few years ago, when Ethereum was still relatively new in the crypto space, a group of Redditors on r/EthTrader had a revolutionary idea. They wanted to take their subreddit, a place for Ethereum fans, traders and builders, and make it something more than just a place to post memes and talk about crypto. They dreamed of a (tokenized) community that could run itself, free from the control of centralized platforms

That's when DONUT was born, a special little token that started as an experiment called Subreddit Points (later evolved into Reddit Community Points) in 2019.

The concept was simple, and yet it was ahead of its time: reward people with tokens for posting content online, and let those tokens give users a say in how their community worked. These Redditors created a platform where the users, not some corporation, called the shots. That's what r/EthTrader was looking for, and DONUT was the key.

A man named Carl Larson, the subreddit's top moderator and an Ethereum "OG", kicked things off by pushing for a smart contract to make DONUT truly decentralized, cutting Reddit out as the middleman.

The early days were hard. There was criticism about the fact that certain people had way too much power and a couple of users accumulating a lot of tokens. This led to arguments about fairness and control later on.

However, the community didn't just complain, everyone rolled up their sleeves and got down to business. r/EthTrader thought of ways to fix the system, like moving DONUT to an Ethereum smart contract. People were learning, failing, and building something together, all while Ethereum itself was still figuring out what it could be.

DONUT was more than a token, it was a proof of concept. It showed that the blockchain could support a social space where users had real stakes: financial, creative, and even emotional. Users could earn Donuts and then use them to vote on subreddit rules or tip others. It was a living experiment in decentralization.

Later on, DONUT evolved. It moved beyond Reddit's walls, becoming an actual ERC-20 token users could trade or transfer. The r/EthTrader community didn't stop there, they created the Donut DAO, a decentralized organization to keep pushing the ecosystem's boundaries. This new organization aims to build minigames and apps, expand to new social platforms, and find ways to connect DONUT to other communities.

What started as a side project became something bigger, a way to combine social networks with the power of the blockchain.

Looking back, DONUT was a SocialFi project before SocialFi even existed. It paved the way for today's buzzword-filled world of decentralized social platforms, proving it's possible to reward creativity, share ownership, and build a community.

This is the story of a bunch of Redditors who dared to dream and ended up creating a quiet technological revolution.

Tokenomics

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DONUT's economy is a balancing act, it was designed to keep the ecosystem working while staying sustainable. After many years of experiments, mistakes, and adjustments, the community created a method that keeps things fair and functional.

Here's how everything works!

Fixed minting schedule

Every year, the Donut DAO mints 20.88 million Donuts, but only when or if the treasury runs out of tokens. Once the new tokens are minted and deposited into the treasury, the system locks minting for 52 weeks. This cap keeps inflation under control, making sure DONUT doesn't flood the market.

Monthly allocation

The treasury distributes Donuts every month to support the community and its projects.

In total, 1,740,000 Donuts are distributed and allocated every month:

  • Content creation (subreddit rewards): 850,000 DONUT
    • Posts: 510,000 DONUT
    • Comments: 340,000 DONUT
  • Liquidity incentives: 450,000 DONUT
  • Community contests: 25,000 DONUT
  • Donut DAO treasury: 415,000 DONUT
    • Developers (each): 30,000 DONUT/month + grants
    • Moderators (each): 15,000 DONUT/month
    • Community contributors (each): 5,000 DONUT/month
    • Artists: Grants

Community treasury

The Donut DAO treasury is guarded by 11 multisig members. Any transaction requires 5 guardians to sign off, thus making Donut DAO's funds and operations secure.

Revenue

The Donut DAO acquires revenue through partnerships, strategic investments, and, primarily, LP positions (fees, yield farming, etc). These earnings reintegrate the tokens back into the system, giving the Donut DAO a steady income to finance the functioning of the economy.

Deflationary mechanisms

To prevent DONUT's supply from increasing uncontrollably, the community developed methods that burn tokens efficiently.

Special Memberships are seasonal subscriptions, represented by NFTs, that give different perks to subscribers on r/EthTrader. By subscribing, users actively contribute to DONUT tokenomics. Donuts used for membership subscriptions are burned, reducing the circulating supply and supporting the value of DONUT.

In April 2025, the community voted for ETIP - 122 Burn undistributed DONUT from monthly allocations (the "distribution"). As such, any undistributed DONUT in a round (month) gets burned. If subreddit activity drops, less tokens are distributed, which in return increases the burn rate. Less participation means higher rewards per user and also a higher burn rate. This way, the economy remains sustainable even in times of less activity.

Third parties can buy and burn DONUT in exchange for a pinned post slot on the Donut DAO's platforms to advertise their products / services.

Utility

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Donuts are the fuel of the r/EthTrader ecosystem. They let users own a piece of their favorite community and make it their own.

DONUT is a SocialFi token that is way more than just internet points. It's a versatile, tradable ERC-20 token that powers a small economy both on and off Reddit.

The Donut DAO is constantly working on new ideas to increase DONUT's utility, thus scaling the ecosystem and promoting DONUT's adoption.

Here's what DONUT is used for.

Transferring

DONUT can be swapped on exchanges or sent anywhere as an ERC-20 token, free from Reddit's walls.

Tipping

Users can tip posts and comments on r/EthTrader, both on and off-chain.

Buying Special Memberships

r/EthTrader Special Memberships offer subreddit perks like the possibility of posting GIFs and customizing the user flair.

Voting

Holders can use their Donuts to vote in weighted polls, shaping subreddit rules and DONUT's future.

Advertising

Advertisers can burn DONUT to rent pinned posts.

Moderating

After earning and holding a certain amount of Donuts, users gain moderation rights on r/EthTrader, allowing them to approve and remove submissions.