In style social community platform Reddit announced the wind-down of its blockchain-based community points program on Oct. 17 citing scalability points. The announcement created controversy within the crypto group with many calling it a rug-pull as the worth of the native token on totally different subreddits tanked after the bulletins.
Every subreddit had its personal native token. For instance, the Moons (MOON) token was the native crypto asset of the r/CryptoCurrency board, whereas Bricks (BRICK) was for the r/FortNiteBR subreddit. Customers may spend these factors on badges and unique gadgets for his or her avatars.
On the time of the announcement the moderators of a lot of the subreddits concerned with the group factors program claimed to be unaware of the choice. Nonetheless, that is now being referred to as into query as new on-chain knowledge recommend not less than a few moderators holding Moon tokens could have been linked to a few wallets that dumped thousands and thousands of the tokens shortly earlier than the precise announcement.
Associated: Reddit community tokens soar on Kraken listing
On-chain analysts corresponding to Pledditor have been the primary to attract consideration to the actions of a subreddit moderator with the pseudonym Mcgillby. On-chain knowledge reveals that this moderator transferred greater than 100,000 Moons over two totally different transactions on the Arbitrum Nova blockchain, turning them into greater than $23,000 in ETH. The person subsequently deleted all earlier Reddit posts.
Here’s a record of Reddit moderators performing on inside info BEFORE the announcement: pic.twitter.com/xAh75hOVEa
— Pledditor (@Pledditor) October 18, 2023
In one other incident, simply 17 minutes earlier than Reddit’s open assertion, “rider_of_the_storm,” a unique moderator, allegedly shifted 345,422 Moons, price over $69,000 on the time, to an change handle. The Reddit account in query has since been deactivated. In line with Lookonchain, on-chain knowledge confirmed that not less than three of the directors overseeing the cryptocurrency subreddit liquidated tokens some 20 to half-hour earlier than the announcement went public.
— Lookonchain (@lookonchain) October 19, 2023
A cumulative statement from the Reddit moderators clarified that they obtained the discover concerning the termination of the group factors program an hour earlier, suggesting not less than three moderators could have used the prior info to dump their token holdings.