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Along with the points already made, I feel that in order for somebody to qualify as a moderator, they should have already made a considerably large contribution to the community - helpful and meaningful posts for example.
I wouldn't want people moderating my community who have only been members for a couple of weeks, when there's members who may have been there for many years who are well respected by others.
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Yes Josh, that too is a great point. Right now we are not choosing mods as there is a contest. The Q is who will continue after the contest?
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I'd also like to add one more thing... which I feel is pretty important.
Moderating is not about removing, it's about "keeping" the "right" content. ;)