What is Reddit’s MOON Token: A Reward for Redditors
Key Questions Answered
Launched in June 2020, r/CryptoCurrency’s Moons (MOON) is a part of a new “Community Points” model on Reddit, a website that combines social news aggregation, content rating, and discussion. Specific “subreddits” or forums dedicated to particular topics can implement this model to reward “Redditors” or Reddit users for community participation. Currently, MOON trades at $0.24 per token with a capped supply of 250 million, for a fully diluted market cap of $60 million.
What Is MOON Token?
MOON is the official cryptocurrency of the r/Cryptocurrency subreddit. Like all Reddit Community Points tokens, it is an ERC-20 token built on the Ethereum (ETH) network. As a result, anyone can easily verify MOON token ownership on the Ethereum blockchain. Smart contracts handle all MOON token functions automatically, thereby reducing the possibility of malicious actions.
Redditors can freely trade MOONs and use them for a specific list of purposes within the community. Currently, users can use MOON for the following applications:
- Redditors can spend 1,000 MOONs per month to purchase a special membership to the r/Cryptocurrency subreddit. The membership comes with features such as colorized usernames, special loyalty badges, and the ability to post comments using GIFs and animated emojis.
- Redditors can also use the tokens to buy special stylized badges and awards (Reddit coins) to give to other Redditors as a way to recognize or react to their contributions.
- MOON token holders can participate in polls to vote for governance and subreddit improvements. The votes are weighted according to the amount of tokens users have earned across their account’s lifetime.
- Redditors can use MOONs as tips and send them to other Redditors for their content.
How To Get MOONs?
1. Create a Reddit Account and Submit an Application
First you must create a Reddit account, download the official Reddit application on any phone, and sign into the account. Then, go to the link here and follow the instructions on the webpage. Currently, the only way to check the vault balance is through the official application. Once Redditors are finished with the vault setup, they can start to contribute to the website.
2. Earn Karma through upvotes and original posts
Reddit utilizes a karma system to show the best possible content to users. When users contribute to the website through comments or original posts, they earn karma when their posts or comments receive upvotes and lose karma when they receive downvotes. Additionally, users can earn karma by giving and receiving awards. Take note that the number of upvotes and downvotes a user has is not equivalent to the user’s karma. Instead, the website calculates karma according to an algorithm.
When users comment on a post and receive upvotes, they receive a corresponding amount of comment karma. On the other hand, when they create an original post, they receive post karma. The sum of an account’s karma on Reddit serves as the basis for measuring the individual contribution of Redditors. Reddit then publishes the karma data associated with the particular subreddits for the distribution of Community Points.
3. Distribute MOON tokens
The r/CryptoCurrency subreddit distributes MOONs once every four weeks based on the amount of karma a user has earned. It also allows users to propose alternative distribution with a proposal and community vote. There are two noteworthy days every four weeks per the MOON calendar:
- Snapshot day: The date when Reddit calculates the karma of each account.
- Distribution day: The day when the accounts receive the corresponding number of MOON tokens into their vault.
If a user’s overall karma is positive in the active time period, they will receive MOONs. If a user’s overall karma is negative, they do not gain any MOON tokens. MOON tokens cannot be deducted from the vault, so users do not need to worry if their karma is well into the negatives. The maximum number of MOON tokens a user can receive per four week period is 15,000 MOONs.
Rules and Policies Regarding MOONs
New users should not expect to comment or submit posts once they join the r/CryptoCurrency subreddit because it implements karma and account age requirements to prevent spam. New Redditors must contribute to other subreddits on the website for a period of time before achieving the requirements set by the r/CryptoCurrency subreddit.
Currently, Redditors require at least 50 comment karma and a minimum account age of 30 days to comment in the r/CryptoCurrency subreddit. To submit a post, Redditors need a minimum of 500 comment karma and an account age of at least 60 days. MOON token holders can change these karma and account age requirements through proposals and community votes.
What Is Vote Manipulation and Karma Farming?
One factor that affects MOON distribution is vote manipulation. The common forms of vote manipulation include using multiple accounts or voting services to change voting scores and asking users on Reddit or other sites to vote for personal gain. Reddit has site-wide policies that strictly prohibit vote manipulation. The website also has dedicated teams and technology in place to detect and prevent vote manipulation tactics. Redditors found to violate such policies will be banned (temporarily or permanently) from specific subreddits or the site entirely.
Another issue is karma farming, or more aptly, MOON farming, which is a highly aggressive form of community participation. Redditors on the r/CryptoCurrency subreddit generally refer to “MOON farming” as increased participation to earn karma by commenting and constantly posting to “farm” MOONs. However, Redditors sometimes use the term to accuse others of gaming the system. For example, users submit plagiarized content, repost older but popular posts, and create fake stories to receive upvotes before the moderators delete their posts quickly.
MOON Token Price History
In January 2021, MOON’s price hovered around $0.013 up until the end of the month. The price skyrocketed by more than 800% to $0.12 at the start of February 2021, possibly following the rise of Dogecoin (DOGE) around the same time frame. MOON traded in an almost sideways trend and seemed unaffected by the overall bullish trend in the cryptocurrency market that occurred in the first quarter of 2021.
Nonetheless, the token did receive a small boost at the start of May 2021, where the price increased from $0.07 to $0.14. MOON’s price then plummeted a few days later to under $0.05 in the wake of negative cryptocurrency headlines. However, MOON’s price rallied 3000% in July 2021 from $0.05 on July 1 to $0.21 on July 31. The largest part of the rally began on July 21, following news that MOONs will migrate to Arbitrum, a Layer-2 scaling solution on Ethereum. The team successfully migrated MOONs to Arbitrum on July 23.
According to the block explorer, the amount of MOON tokens in circulation is around 125 million. At launch, the system distributed 50 million MOONs to the subreddit community based on karma score. Afterward, the token distribution in the next month started at 5 million and will decrease by 2.5% each month until it reaches the maximum cap of 250 million. The distribution curve is shown below.
MOON follows a deflationary model where the tokens spent on Reddit are burned each month and removed from circulation. The burning of tokens may increase scarcity and increase its value over time. However, the protocol will reintroduce half of the burned MOONs back into the economy in the following month. This model ensures that there will always be new MOON tokens to distribute after the release of all 250 million tokens.
What Is the Future of MOON?
For some Redditors, MOON is regarded as a cryptocurrency with little to no value because it contains no other purpose than to reward subreddit participation. Users can only use MOONs on Reddit, so features that users can purchase are mostly visual.
Where can I trade MOON?
MOON is not listed on any major cryptocurrency exchange, and there are limited trading pairs. So far, users can swap MOONs with other cryptocurrencies, such as Stellar’s Lumen (XLM) and Nano (NANO). This is typically done on sites set up by users themselves. Another option is to go through Honeyswap, a decentralized exchange, but users need to undergo multiple unintuitive token conversions for a successful trade. In addition, due to MOON’s low liquidity, selling large amounts of tokens at once might cause the token price to fall.
Currently, seven out of the top ten MOON token holders are r/CryptoCurrency moderators, creating a semi-centralized system. As votes on governance polls are weighted according to the number of tokens held, there is a conflict of interest where some moderators might go for their personal gain rather than community benefit. Also, some moderators might even remove the disadvantageous posts and comments or ban troublesome users advocating for change while pinning content that benefits themselves to maximize MOON earnings.
r/CryptoCurrency’s MOON is part of a unique idea that seeks to incentivize high-quality community participation in the form of original posts and comments. Users can spend MOONs to buy a special community membership and other visual features, vote in governance polls, and tip other users. Users earn MOONs according to their four-week karma score, which is calculated based on the upvotes and downvotes they receive from their posts or comments within that time period. However, MOONs are not very useful outside of their role in facilitating community participation. Users cannot easily sell or purchase MOONs because the token is not listed on most major cryptocurrency exchanges. Nonetheless, some users view MOON tokens as free money that can be accumulated without much effort.