Community Points allow members of Reddit communities to own a piece of their community, earn rewards for quality contributions, and unlock special features.
Read all about it at the above link. There's way too much to process here. This is going to be wild.
Okay. Each sub gets fresh points according to it's size, activity and admin preference.
Every month your karma in a sub gets converted into these new points. These points can then be used to tip others, buy animated emojis or badges to show off. They are also used to make your vote count more in polls.
Mods can give commenters fines for misbehaving and make posts earn less points.
Sounds very capitalist. I guess it makes everybody go to a few big subs, as little subs don't earn anything. And those big subs are overrun by a few big players who floated to the top and stay there because of their influence. Little subs get overrun by alt-right as the fines mods can give there are just pocket money.
But that's what you get when ideology and dictators rule.