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Moderation will always be problematic because unless the person owning the site rules with an idealistic hand and holds his/her mods accountable, there will always be corruption.

One day, when I have a lot of capital, I am going to make my own forum and run it correctly. There will be zero tolerance when it comes to mods. Either they will follow the rules unbiasedly, or they will get canned and replaced by someone who is mature enough to do so.