The r/WSB Saga: Moderation, Enforcement, Decentralization, and More

Okay, so, we’re going to do this. Today’s top fold is reserved for the r/WallStreetBets situation. That doesn’t sound like an emerging technology story, but we’ll explain how it is.

Set the scene

This saga, as our theory goes, is a microcosm of what’s happening in the broader tech world.

Moderation: The r/WSB subreddit briefly went private Wednesday night, with the channel’s mods explaining that they couldn’t handle the influx of new members and posts. Whether it’s enacted by AI or an army of humans, moderation at scale isn’t a new problem in Silicon Valley.

TOS: Another familiar issue = how terms of service are enforced. Discord, another online home where traders congregate, banned WSB’s server Wednesday night for “hateful and discriminatory content.” Then yesterday, the chat platform unbanned the WSB forum and said it would help the group with content moderation.

• For what it’s worth, we joined the server after it was reinstated. It was mostly dogecoin shilling and an unhealthy dose of 🚀🚀🚀.

Decentralization: Let’s say a platform had perma-banned this powerful online community. What likely would have come next = migration to end-to-end encrypted messaging apps and private groups.

Humans vs algos: The run-up in GameStop, AMC, and other meme stonks has highlighted both the power and the typical role of individual traders vis-à-vis institutional ones. Robinhood and other brokers sell their order flow to high-frequency trading firms who can plug that into their algorithms and front-run retail investors.

Fighting back with the algo

DoNotPay, an automated legal service we’ve profiled before, launched a new feature yesterday: Users can automatically join class action lawsuits against brokerages that disabled buys on GameStop and other highly shorted stocks yesterday.

As of last night, 21,000 people had joined the lawsuit via DoNotPay, CEO Joshua Browder told us. The plaintiffs’ average loss was $1,100; the most popular stock purchased was GameStop $215 calls.

Bottom line: The GameStop saga is many things before it is a story specifically about emerging tech. But as we’ve seen this week, online communities and technology have helped reshape the playing field.