Reddit Announces Winddown of Blockchain-Based Community Points Program
Reddit, the popular social network platform, has announced the winddown of its blockchain-based community points program due to scalability issues. This decision has sparked controversy in the crypto community, with many accusing Reddit of a rug-pull as the prices of native tokens on various subreddits plummeted after the announcement.
Each Subreddit Had Its Own Native Token
The community points program involved native tokens for each subreddit. For example, r/CryptoCurrency had Moons (MOON) as its native token, while r/FortNiteBR had Bricks (BRICK). Users could use these tokens to purchase badges and exclusive items for their avatars.
On-Chain Data Suggests Insider Trading
At the time of the announcement, many subreddit moderators claimed they were unaware of the decision. However, new on-chain data raises questions about this claim. It appears that at least a couple of moderators holding Moons may have been linked to wallets that dumped millions of tokens shortly before the announcement.
Moderators Involved in Suspicious Transactions
One moderator, u/Mcgillby, transferred over 100,000 MOON in two transactions on the Arbitrum Nova blockchain before converting it into over $23,000 worth of Ether (ETH). This moderator also deleted all previous Reddit posts. Another moderator, u/Rider_of_the_storm, allegedly shifted 345,422 MOON to an exchange address just 17 minutes before Reddit’s statement was released.
Claims of Insider Information
According to on-chain data from Lookonchain, at least three administrators overseeing the cryptocurrency subreddit liquidated tokens 20 to 30 minutes before the public announcement. This suggests they had inside information about the termination of the community points program.
Hot Take: Controversy Surrounding Reddit’s Community Points Program
The winddown of Reddit’s blockchain-based community points program has caused a stir in the crypto community. Accusations of insider trading have emerged, with evidence suggesting that some moderators may have dumped their tokens before the announcement. This controversy raises concerns about the transparency and fairness of such programs and highlights the risks associated with decentralized platforms. It serves as a reminder that users should exercise caution and conduct thorough research when participating in blockchain-based initiatives.
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