Intro:

Any relatively new coin, introduced to the market, without too much history, with a low market cap, low liquidity, should be met with some scrutiny.

Especially in what they have to offer. Any new coin should be considered a shitcoin until proven otherwise.

Moons are a very different kind of coin. It's a social media token, meant for participation and content reward. It's not primarily meant to buy a cup of coffee, nor have any of the usual DeFi functions.

It's also build exclusively for Reddit, and for this sub.

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What makes something a scam coin?

Something with the sole purpose of making money for a smaller group of people in a subversive manner, without providing any real solution or services, and at the expense of people investing in that coin, by misleading those investors.

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What are the typical properties found in scam coins?

These aren't what makes a coin a scam, but usually scams will have several of these symptoms and red flags:

-Shady team.

-Aggressive marketing.

-Marketing focusing on big returns.

-Complete centralization.

-Governance too centralized.

-Focus on returns instead of tech.

-Doesn't provide a solution, nor not much utility.

-The proof is in the pudding. The mechanism and tokenomics will reveal if something is a scam.

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1- The team.

The team behind Moons have had more than 2 years of work (over 3 years if you count the pre-building). So we are getting a better idea of how they operate now.

The team of developers are the admins from Reddit, not the mods. Some of you may have interacted with them. But the mods here do assist them on the front end and in dealing with the users.

It's really Reddit that's behind Moons. They initiated the project. So Moons come from the very top of Reddit. You have a core developing team, backed by a major social media company, with a front end mod team, and also partnerships outside Reddit.

What have we learned in the last couple years? While initially they didn't communicate as much as we'd have wanted to, that has improved a little. There is still an issue of slow response between the mod team and admin team.

But the admins have shown to provide good development of their token and smart contract, and have been able to find a lot of solutions in scalability and in making Moons work. They've created a secure and functional wallet. The distributions since mainnet have all gone fairly smoothly.

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2- The marketing.

If you look at the marketing of Moons, it's very much focused on "community contribution" and "ownership of a piece of a community". It's very much focus on the social media functions of Moons, and has little to no mention of anything related to money, investment, or painting moons as an investment.

https://np.reddit.com/community-points/

3- Centralization of the token.

Since Moons are a social media token for a specific site, it's expected that it would be heavily centralized, if not completely.

Reddit created the token, and the admins have laid out the basic vision and core principles of Moons. But beyond those core principles, users are free to vote on any other changes they want about distributions, how moons work outside those core principles, and even vote on new features, and changes for the sub.

So they gave back a lot of the control back to the users and the sub.

The token itself runs on a decentralized network. It's an Ethereum token that runs on Arbitrum Nova. Once you get them, it's out of the hands of Reddit. However, the smart contract is still controlled by Reddit.

So you have some aspects that make it less centralized than expected, and Reddit willingly removing their centralized authority, but in the end it still remains centralized at its core, as you would expect for something designed for a private site.

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4- Centralization of the governance.

Is the governance also too centralized? Are the people in charge in control of most of the governance? Is a small group in control of the governance?

Here's how the distribution works:

-50% go to users. Who receive governance.

-10% go to mods. Who also receive governance. And a discretionary portion of that 10% go back to the community in the form of rewards, prizes, etc...

-40% go to Reddit. Those Moons don't participate in governance. A portion of it is what gets burned for things like the membership. And a portion can sometimes be returned to the community, like when they reimburse users for distribution errors.

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https://preview.redd.it/4idw4ygb9ina1.png?778&format=png&auto=webp&s=f0d264d4b4b07af9e189debd4c74f6adce36fd7a

The Reddit wallet doesn't participate in the governance. And a portion of the mod distribution goes back to the users.

So the majority of governance is in the hands of the users. And a little less than 10% is controlled by the mods.

So who actually holds the governance power? Here's a rough estimate based on latest numbers:

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*Numbers not exact, due to a lot of burned and lost moons to be estimated*

I don't know that many coins where there's very little of the governance in the hands of the team, and over 90% going to users.

However, there is a caveat in that seemingly strong decentralization. Mods have a veto power on what proposals can be presented.

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5- Tech and solutions.

What solutions do moons provide?

They solve several problems for social media, like finding a way to reward content creators without relying on ads, provide engagement, create more participation, and attract more users.

Along with giving their users more voice, and a piece of the community.

It has also functioned as a token for many features like tipping, be the reward token for contests and games, buying special membership, purchasing banners and AMA, be the currency for the sub's merchandise, etc...

It has also expanded outside of the sub, and functioned as a the currency for subs paying Moons in exchange for services, and a sort of OnlyFans version with Moons.

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6- What is the mechanism of moons, and are there any signs of scam, rugpull, or bad tokenomics.

Moons are an Ethereum ERC-20 token on Abritrum Nova. They are run by an Ethereum smart contract, and work like your usual ERC-20 token.

They work as a social media reward token on Reddit, distributed for free for community participation. So while they have the function of an Ethereum token, they aren't primarily for buying a cup of coffee. Although, if a merchant wanted to accept Moons and sell you a cup of coffee for Moons, they could.

Moons are designed to be inflationary, and have no true supply cap. Moons will perpetually get re-introduced, but with smaller distributions.

This is because the focus is on utility. Admins want Moon distribution to continue in the future, to be able to function as intended, and not become too hard to earn.

This is the opposite of the typical mechanism of a scam.

There's also no cost to earning Moons. While you could buy them on exchanges, it's fairly easy to earn a lot of Moons for free.

Typically, scams don't give things away for free.

Moons are a governance token, and its functions can be decided by the community. And the majority of the community controls the governance.

It's hard to control a scam, when the community has too much control.

Could someone rugpull Moons?

Even if the mods got together to rug Moons through a proposal, they don't have sufficient voting power. Their only edge is they can veto proposals, but they can't force a proposal they put forward, that the community doesn't want.

Even many whales colluding can't control the governance.

But some big whales could manipulate the price.

It's getting a little harder now that there's growing liquidity, and it's now been added on two major exchanges with more volume.

Only Reddit can really rug Moons. While the Moons you own are yours, and Reddit can't touch them, the utility depends on Reddit. If they decide to discontinue the use of Moons or RCP, then the main utility of Moons would be gone.

You can still use them elsewhere, and build something with them and create new utility. But the original utility will no longer be there.

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TL;DR:

No, they aren't a scam coin, and are missing too many key properties of a scam coin.

In fact, many of its feature are the very opposite of what scam and shitcoins normally do. But it's not immune to rugpulls.

The growing utility, and a focus on innovative social media solutions, is also moving them too far from the realm of traditional "shitcoins".

It's however a centralized coin at its core, as you would expect for a token meant to be used on a social media platform. But Reddit moves some of that centralization away from itself, and allow for users and communities to have a voice on their RCPs. The governance side, however, is decentralized (more so than most governance coins) , with some caveat on vetoed proposals, but is giving the average user significant power.