How is BlueSky currently dealing with moderation of illegal content? What does the AT protocol allow BlueSky to do when it comes to removing posts, deleting profiles, ...?

Nostr is wild and free, and I can foresee issues for relayer coming soon. But this is Nostr's unique strength too, and it is worth every risk.

In my (not so positive) experience, relying on VC money amplifies risk perception and leads to very conservative moderation policies.

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