I hope you are all well and had an excellent week, welcome to CryptoGod-1’s blog on all things crypto. Today I will be assessing the devastating news for many Reddit users surrounding community points, and how inside information meant the some moderators had the opportunity to benefit while many, many others missed out.
Reddit 'Moons' Rugpull
Reddit’s director of consumer and product communications Tim Rathschmidt told TechCrunch earlier in October how the social media platform decided to end their community points program, looking instead at solutions which are more favourable for scaling.
“The regulatory environment has since added to that effort. Though the moderators and communities that supported Community Points have been incredible partners — as it’s evolved, the product is no longer set up to scale.”
Community points had first been launched in 2020 for users who positively engaged in select subreddits in order to incentivize better content and conversation. Included within the points were the likes of Moons for the subreddit r/CryptoCurrency, and Bricks for the subreddit r/FortNiteBR. The points were essentially interchangeable Ethereum tokens stored in Reddit’s Vault, which operated as a cryptocurrency wallet.
The announcement to terminate the rewards on Tuesday the 17th of October 2023 was swiftly followed by reports on Wednesday the 18th surrounding moderators dumping their moons in the space of an hour before the wider communities were noted of the upcoming changes. The evidence was shown by several on-chain data analytics, which ended up causing controversy among the crypto community at large.
At least three moderators from r/CryptoCurrency have been accused of dumping thousands of dollars worth of Moon tokens immediately, which caused the token to drop by around 22% prior to the announcement.
The moderators had originally claimed ignorance of the impending announcement, claiming to be as in the dark over the news as the rest of us. However, the analytics has proven otherwise and raised questions over whether it should be considered a rugpull. Two moderators in particular, known as "Mcgillby" and "rider_of_the_storm" are at the centre of this scandal.
User "Mcgillby" is known to have transferred more than 100,000 Moons over the course of two transactions on the Arbitrum Nova blockchain, converting them into over $23,000 in ETH.
User "rider_of_the_storm" is reported to have moved 345,422 Moons, worth about $69,000 at the time, to an exchange address roughly 17 minutes before the announcement.
The on-chain data analytics firm Lookonchain confirmed this information, along with the fact these transaction all happened within 30 minutes before the news was broken by Reddit. Once these transactions were complete, both moderators appeared to have taken steps to erase their digital footprint, with "Mcgillby" deleting all previous posts and "rider_of_the_storm" deactivating their Reddit account.
This news resulted in, as expected, heated discussing within the Reddit community along with those in the wider crypto and blockchain ecosystem. Many screamed their outrage of wasted time, effort engaging with the community, and even some had began to DCA into the project just to see their money go up in smoke.
Reddit moderators released a cumulative statement which noted they had been given an hour's notice prior to Reddit announcing the program's termination, which gives credence to the belief of moderators having time to act upon the information. Some have questioned whether or not legal repercussion could follow the actions of those involved in the dumping of Moon's.
Giving the timing and circumstances surrounding the Moon token dump, many are beginning to question the integrity of certain Reddit moderators while also adding to discussions surrounding the transparency and ethics in the crypto and blockchain community at large. Reddit has yet to issue an official statement in response to the allegations, leaving many to speculate on what actions, if any, the platform will take to address the issue. Some within the community have their own view and take on things, such as the potential remaining with the token for those who still hold it, and not to confuse it was a memecoin or hype token such as Terra. Only time will tell if such optimising can come to fruition.
Have a great day.
CryptoGod-1.
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