Onchain: Reddit Rug, Interface Rent, and a media-induced Pump and Dump

Onchain: Reddit Rug, Interface Rent, and a media-induced Pump and Dump

Story One

Reddit Rug

Bad times for the people who were bullish on Big web2 social platforms integrating web3 elements. After Meta shut down its NFTs on Instagram initiative a while back, the next one to kick the curb to web3 is Reddit.

Reddit recently announced the wind-down of its community points program. The points program assigned each subreddit (the thematic communities on Reddit) its own currency. First introduced in 2020, the program aimed to reward users who engaged positively and incentivize better content and conversations. Points were shown alongside usernames to highlight users' reputations on a platform where everyone is anon by default.

The points initially lived on Ethereum and were then moved to Arbitrum Nova when it became clear that the Ethereum mainnet was simply too expensive and slow for a big community. Unfortunately, not even that helped matters, and the infrastructure still wasn't up for the task of scaling.

As the youngsters would say, what started as a W for Arbitrum just became a huge L.

Needless to say, the announcement dealt a killing blow to the price of these community currencies, leading some to call it an outright rug.


Takeaway: With Reddit still chasing its IPO, it’s unsurprising they’d kill initiatives that do not scale. After all, the platform has been scaling its user base and everything else to ensure the number goes up - at the expense of quality conversations, ironically.

Story Two

Interface Rent

In case you haven't noticed yet, despite the promise of removing the intermediaries and fees that'd come with it, so far, web3 has been excellent at introducing new ways to charge fees. Sure, gas fees are not going to one centralized party, yet it still doesn't feel much different from paying PayPal.

Uniswap Labs has found a new place to charge some fees. Its founder, Hayden Adams, recently shared that they would start charging a small fee on swaps that originated through their interface. Uniswap might have taken inspiration from Monopoly, where you can charge any player coming across your street rent.

Since October 17th, fees of 0.15% have been applied on various swaps in addition to the normal protocol fees. Uniswap Labs wants to use the money to fund its operations sustainably, read, not just burn through VC cash.

Takeaway: Questions of necessity aside, it highlights a broader question of how entities maintaining interfaces should maintain themselves. Fortunately, you have options. If you don't want to pay interface fees, you can always use an aggregator instead or try this fee-free interface (NFA!)

Story Three

Cointelegraph Pump and dump

Cointelegraph is one of the biggest media outlets in the crypto space and boasts nearly 2 million followers on X. What they tweet impacts the ecosystem, and one would assume that the media team could handle that responsibility. Yet, recently, there was a big moment where "mistakes were made." On October 10th, the official Cointelegraph account tweeted that the first Bitcoin ETF had been approved.

The ETF approval triggering a bull is the hopium degens clinging on like Jujutsu Kaisen fans to any hint that somehow Gojo Satoru will come back to life.

Gojo Satoru, whose big female fan base still hopes for his return from the dead. https://tokyorevengers.store/wp-content/uploads/2023/02/gojo-satoru-1.jpg

The tweet triggered a short rally of BTC passing $30k, only to fall back once the Cointelegraph team noticed their mistake and apologized. In their since-issued post-mortem, Cointelegraph explains that they had received the information from a telegram channel. Whoever discovered that story found it so important that they tweeted it out instead of checking with the editorial team.

To give Cointelegraph some credit, at least they had the decency not to blame it on the intern.

Takeaway: It's a shame that not even a big news outlet like Cointelegraph takes time to verify their sources when the stakes are this high. Fortunately for them, this will be fast forgotten since bitcoin is rallying again on the news that Black Rock's ETF ticker has appeared on the Depository Trust and Clearing Corporation's website - yet another sign of a fast-approaching approval.

Fact: While you might think of Monopoly as the most capitalist board game ever, its inventor, Elizabeth Magie, had very different principles in mind. She designed it to teach about the dangers of capitalism and provided two sets of rules. The first is the one we're all familiar with. The now-forgotten second set of rules rewarded cooperative play and kicked back gains whenever wealth was created. You can find out more about the origins here.

Naomi from CoinJar

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