I love MOONS, but I just sold out. Here's why:
For those that don't know, your Vault is not exclusive to r/cryptocurrency, it's a Reddit plan to monetize karma as "community points" across the entire site, r/cc is just the guinea pig in this endeavor. Your vault can also hold BRICKS (fornite subreddit) or
DONUTS (ethtrader subreddit). Ideally, each distribution would pay the best content creators motivation to post keep posting quality content.
For r/CC, each distribution subscribers get half the tokens. The other half goes 40% to Reddit and 10% to mods. With just a $1 billion market cap, several of the r/cc mods would be multi-millionaires (in USD). But its wrong that mods have so many tokens. Each moth, distribution decreased by 2.5%. So, as users go up, the number of moons being distributed is going down. This system is problematic.
Content creation should be king. Unfortunately, MOONS were designed to make mods rich. For every distribution, mods split 10% of what users get. And with governance weighted by moons, mods have also consolidated voting power. The top six MOON holders are mods. So, mods have centralized MOONS to have whale power over the market price; due to weighted voting, they have control over voting governance; and they now control over which posts can be removed and receive no karma–the result of a shamefully worded post that claimed it was necessary to prevent rulebreakers from receiving moons…but I and others in the comments have seen many quality posts removed, seemingly without reason. We have no way to know if mods are running multiple accounts so they can remove user content and favor their own posts or favor their friends' posts…this governance rule is an invitation for fraud.
Whoever set up MOONS also heavily front-loaded the distribution. All the mods need is for MOONS to reach a major exchange and then many of them will become rich. That's likely to happen within the next year. If you didn't know, the distribution amount reduces each month. So, the number of users goes up. More redditors. Fewer coins. Reducing the distribution is a great way to pump the price for early adopters and mods, but it's a bad plan for the future growth of the subreddit as there will be fewer and fewer MOONS to distribute amongst the growing user base, and god knowns what kind of MOON farming will occur if Moons reach $1
So…if you're Reddit, and you're looking at MOONS right now, you're looking at the kind of centralized corruption that has infected many financial systems. Why does that matter…because the new infrastructure bill is likely going to turn Reddit into a crypto broker. That means KYC info. That means dealing with IRS forms for all of us. Reddit might have to fight to keep its pilot Vault program alive–it might have to add layers of administrative costs. And if I'm a Reddit exec looking at the Vault program on r/cc, it looks like mods hoarded most of the wealth and power. So, Reddit can fight to protect the Vault…or it can simply kill the program, shutter the Vault for now and come back with the market has more legal clarity and stability.
And next time implement it in a way where content creators have the power–not mods.
Edit strikethrough: commenter informed me that r/ethtrader DONUTS cannot be held in Vault