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Reddit’s spokesperson, Tim Rathschmidt, introduced on Wednesday that the corporate will finish its Group Factors program by November 2023 because of its resource-intensive nature and sophisticated regulatory surroundings. The announcement was made throughout an interview with TechCrunch.
The Group Factors program, which rewarded customers with Ethereum-based ERC-20 tokens MOON, BRICK, and DONUT, noticed a major devaluation following the announcement. The MOON token dropped by over 85%, BRICKS by greater than 50%, and DONUT almost 48%. This extreme depreciation in worth resulted in substantial investor losses and sparked hypothesis a couple of potential rug pull.
A rug pull is a fraudulent follow throughout the cryptocurrency group the place builders abandon their tasks, resulting in sudden crashes within the worth of associated cryptocurrencies. This example has been highlighted by blockchain safety skilled Jameson Lopp, who cited a Reddit consumer who misplaced 1000’s of {dollars} as a result of crash.
The termination of Reddit’s Group Factors program underscores the challenges confronted by social media platforms in managing cryptocurrency reward programs amidst a posh regulatory panorama. Because the November deadline approaches, customers and buyers are urged to watch the state of affairs carefully.
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